By: CARICRIS
February 2, 2021
Caribbean Information and Credit Rating Services Limited (CariCRIS) has assigned CariA (Local Currency Rating) and CariA- (Foreign Currency Rating) on its regional scale, jmAA+ (Local Currency Rating) and jmAA (Foreign Currency Rating) on the Jamaica national scale, to the proposed bond issue of up to USD 40 million of PBS Technology Group Limited (PBSTGL or the Company). The regional scale ratings indicate that the level of creditworthiness of this proposed debt obligation, adjudged in relation to other obligations in the Caribbean is good. The Jamaica national scale rating indicates that the level of creditworthiness of the proposed debt obligation compared to other debt obligations in Jamaica is high.
The ratings are supported by PBSTGL’s significant competitive advantages and strong regional presence in the information and communications technology (ICT) industry. The acquisition of Massy Technologies (Trinidad) Limited and Massy Technologies (Guyana) Limited in September 2020 to form PBSTGL allowed the Musson Group to almost double its investment in the ICT industry. Prior to the acquisition, these companies had a history of stable financial performance, good liquidity, healthy capitalization and strong debt service coverage levels. The strong support from Musson (Jamaica) Limited further supports the rating. These ratings are tempered by the significant sovereign risk exposure compounded by heightened economic uncertainty in the territories in which PBSTGL operates.
CariCRIS also assigned a stable outlook on the ratings. The stable outlook is premised on CariCRIS’ expectation that over the next 12 to 15 months PBSTGL will continue to record stable financial performance driven by the performance of its five operating subsidiaries and meet its debt obligations in a timely manner over the period.
About the Company:
Musson (Jamaica) Limited acquired Massy Technologies (Trinidad) Limited (with operations in Trinidad & Tobago, Barbados, Jamaica, and Antigua & Barbuda) as well as Massy Technologies (Guyana) Limited in September 2020 at a cost of US $40 million, through a newly formed wholly- owned subsidiary, PBS Technology Group Limited (PBSTGL). PBSTGL was incorporated in St Lucia, as a private limited liability holding company. PBSTGL is now one of the largest information technology and communications providers in the Caribbean.
Musson (Jamaica) Limited, the ultimate parent company of PBSTGL, has been in operation since 1962. It is the successor to SP Musson Son & Company Limited which was originally founded in 1820. It is a diversified holding company operating in over thirty countries worldwide in the areas of distribution, manufacturing, agribusiness, information technology and insurance. Additionally, the Group owns controlling stakes in three publicly-listed companies on the Jamaica Stock Exchange (JSE)1, as well as other private companies.
PBSTGL plans to issue via a private placement a secured, fixed rate bond of up to US $40 million. The bond will be issued in two tranches (Table 1) and each tranche will be serviced through quarterly interest payments with principal being repaid via bullet payments at maturity. The proceeds of the bond will be utilized to repay external interim financing sourced to fund the acquisition from the Massy Group in September 2020.
