Caricris Reaffirms ‘Good’ Creditworthiness Ratings to GK And its Bond Issue of Up to J$3Bn

• Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the regional scale ratings of GraceKennedy Limited (GK) at CariA (Local and Foreign Currency Ratings) and the Jamaica national scale ratings at jmAA (Local and Foreign Currency Ratings).
• CariCRIS has reaffirmed the Group’s regional scale rating of CariA (Local Currency Rating) for its bond issue of up to J$3Bn, as well as its Jamaica national scale rating of jmAA (Local Currency Rating). The CariA rating reflects a good level of creditworthiness for both the obligor and the debt obligation when compared to others within the Caribbean. The jmAA rating indicates a high level of creditworthiness relative to other issuers and debt obligations within Jamaica.
• CariCRIS also expects continued strong demand for the Group’s food products and services, supported by new product launches and enhanced distribution channels. The demand is expected to be bolstered by economic growth conditions in its main market, Jamaica. Notwithstanding this, the Group’s performance may be adversely affected by lingering geopolitical pressures and impending trade tensions with high levels of policy uncertainty.
• The ratings and/or outlook could improve if there is an enhancement in the Government of Jamaica’s creditworthiness. Additionally, they could also improve if the company sustained financial performance indicators such as a PAT margin of 5.5% or higher, an operating profit margin of 7.5% or higher, and a return on assets (ROA) exceeding 5%, each maintained for at least two consecutive years.
• Conversely, a downgrade could result from significant financial or operational deterioration, including sustained revenue decline, profit margin compression, rising debt levels, weakened debt service capacity, or a drop in the Government of Jamaica’s creditworthiness.

(Source: CariCRIS)