October 05, 2017
CariCRIS reaffirms “high creditworthiness” credit ratings for TTMF
CariAA– (Regional Scale Local Currency)
CariAA– (Regional Scale Foreign Currency)
ttAA– (National Scale Local Currency)
Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed its issuer/corporate credit ratings of CariAA– (Local and Foreign Currency Ratings) on its regional rating scale and ttAA-on the Trinidad and Tobago (T&T) national scale of Trinidad and Tobago Mortgage Finance Company Limited (TTMF). These ratings indicate that the level of creditworthiness of this debt obligation, adjudged in relation to other debt obligations in the Caribbean and within T&T is high. The ratings include a 1-notch upgrade for the high likelihood of support from the Government of the Republic of Trinidad and Tobago (GORTT), if needed.
CariCRIS also has maintained a negative outlook on the ratings. The negative outlook is based on our expectation that the tight economic conditions in Trinidad and Tobago, likely to continue through 2018, could possibly lead to some level of deterioration in the company’s asset quality, notwithstanding its proactive risk management strategies.
TTMF’s ratings reflect its strong market position and strategic public policy role in the implementation of the Government of the Republic of Trinidad and Tobago’s national housing policy. Additionally, the company’s strong financial performance, proactive risk management stance underpinning improved asset quality and good capitalization also support the ratings. These strengths are tempered by prevailing economic challenges which continue to drive a slowdown in real estate origination and could lead to some deterioration in asset quality. The asset/liability mismatch which presents both liquidity and interest rate risks also constrain the ratings.
About the company
Trinidad and Tobago Mortgage Finance Company Limited (TTMF) was incorporated under the Companies Act of Trinidad and Tobago on December 3, 1965. Its shareholders are the Government of the Republic of Trinidad and Tobago (GORTT) and the National Insurance Board (NIB), which own 49% and 51% respectively of the total shares outstanding. TTMF is not a licensed deposit-taking institution and relies primarily on debt financing to fund its lending operations.
TTMF was formed to fulfil the GORTT’s mandate of providing affordable residential mortgage financing for low to middle-income households in Trinidad and Tobago (T&T). It is the lead vehicle for mortgage financing under the State’s housing business model in which the Trinidad and Tobago Housing Development Corporation (HDC) constructs the housing, and TTMF provides the mortgage financing. Although the HDC refers potential homeowners to the TTMF, they can obtain financing from other institutions. However, TTMF widened its target market several years ago to include all persons interested in residential mortgage financing.
The company’s product range includes conventional residential mortgage loans and home equity loans with tenors of up to 30 years at stable interest rates, currently ranging between 2% and 7% per annum1. In 2016, open market loans2 represented 53.8% of its mortgage asset pool while HDC loans represented 24.7%.
In 2014, the Government of the Republic of Trinidad & Tobago (GORTT) approved the creation of the Trinidad and Tobago Mortgage Bank (TTMB), an institution conceptualized to leverage on synergies between the Trinidad and Tobago Mortgage Finance Company Limited (TTMF) and Home Mortgage Bank (HMB). In 2017, a Memorandum of Understanding was signed between the TTMF and HMB in which both companies are expected to derive benefits from a close corporate alliance while maintaining the integrity and independence of both companies. The alliance covers the sharing of information technology and administrative facilities and technical skills.
For more information on the ratings of Trinidad and Tobago Mortgage Finance Company Limited, please visit www.caricris.com or contact: