The Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the credit ratings of the $4 billion bond issued by the National Investment Fund Holding Co Ltd (NIF). CariCRIS announced on July 8 that the NIF bond has secured a CariAA rating on the regional scale and ttAA rating on the national scale, demonstrating a high level of creditworthiness compared to other obligations in the Caribbean and Trinidad and Tobago.
These ratings are underpinned by the strong credit quality of NIF’s assets, which consistently generate investment income and sufficient cash flows to cover interest payments. Additionally, as NIF is fully owned by the government, there is a possibility of support if necessary.
However, the ratings are also affected by the discretionary nature of NIF’s cash flows, which largely come from dividends. There is also a concentration risk, with a significant portion of the company’s core earnings derived from just two entities – Republic Financial Holdings Ltd and Trinidad Generation Unlimited.
Created by the government, NIF serves as a special-purpose investment company to monetize its assets. In 2023, the company reported a loss of $2 billion due to major investments in local companies such as Angostura Holdings Ltd, One Caribbean Media Ltd, Republic Financial Holdings Ltd, Trinidad Generation Ltd, and West Indian Tobacco Co Ltd (Witco).
Notable investments include $126.4 million in Angostura, $702.4 million in Republic, $165 million in Witco, and $1.12 billion in Trinidad Generation. Despite the loss in 2023, NIF remains a key player in the investment landscape with strong credit ratings and a stable outlook for the future.
