GraceKennedy Limited’s Issuer Credit Rating & Bond Issue Rating Reaffirmed at CariA

• On June 13, 2025, CariCRIS reaffirmed the issuer ratings of GraceKennedy Limited (GKL) at CariA for both local and foreign currency on the regional scale, and jmAA on the Jamaica national scale. The Group’s bond issue of up to J$3Bn was rated CariA (Local Currency Rating) on the regional rating scale and jmAA (Local Currency Rating) on the Jamaica national scale. A stable outlook was assigned, reflecting no immediate expectations for rating changes.
• Factors that could lead to an upgrade in ratings on GK include an improvement in the creditworthiness of the Government of Jamaica, along with stronger financial performance by GKL. Specific metrics include a profit after tax (PAT) margin of 5.5% or more, an operating profit margin of at least 7.5%, and a return on assets (ROA) above 5%, all sustained over two consecutive years. That said, for the financial year ended December 31, 2024, GK’s PAT and operating margins amounted to 5.3% and 7.5%, respectively, while ROA stood at 16.2%.
• Conversely, the ratings may be downgraded if there is a significant and sustained decline in revenue, specifically, more than 10% over two years, or if the operating profit margin falls to 5.0% or lower. Additional risks include trade disruptions or tariff increases that could cause the gross profit margin to fall below 35%.
• A decline in the parent company’s debt service coverage ratio (DSCR) to below 1.33x; an effective Debt-Service Coverage Ratio (DSCR) below 1.5x; a Debt to EBITDA ratio above 4.0x, and a deterioration in the Government of Jamaica’s creditworthiness are all factors that would negatively impact the ratings.

(Source: CariCRIS)