CariCRIS Reaffirms Wigton J$5.8Bn Bond

• CariCRIS reaffirmed the assigned issue credit ratings of the J$5.8Bn bond issue of Wigton Energy Limited (Wigton) to CariBBB+ (Local Currency Rating) on the regional rating scale and jmA (Local Currency Rating) on the Jamaica national scale.
• The ratings signify that on the national scale, the bond’s creditworthiness is considered good compared to other obligations in Jamaica and adequate on the regional scale, relative to other obligations in the Caribbean.
• Additionally, CariCRIS has maintained a stable outlook on the ratings. This stable outlook is predicated on the high likelihood that revenues and profits will moderate over the next twelve (12) to fifteen (15) months. It also incorporates expectations that Wigton will meet all debt service commitments in a timely manner. This is supported by steady revenue from Wigton's core wind energy operations, ongoing initiatives to diversify into solar energy generation, and the projected economic growth in Jamaica.
• CariCris also noted factors that could improve Wigton’s ratings and /or outlook to support a sustained 7% increase in operating profit for the next 2 years. These factors include: successful diversification into other renewable energy sources and geographical markets to boost revenue stability and/or expansion; improved operating efficiency and continued improvement in the Jamaican economy over the next year to support increased energy demand.
• Conversely, factors that could result in a ratings or outlook downgrade include: violation of debt covenants, failure to meet performance requirements under the Power Purchase Agreements, a 35% or greater increase in total operating expenses and/or a 15%  or more decrease in total operating revenue causing net profits to decline by over 80%.  These factors could limit Wigton’s ability to refinance or fully repay the bullet payment upon maturity.

Source: (JSE & CariCRIS)