S&P reaffirms FirstCaribbean’s rating

Following the announcement that CIBC and Barclays have signed a non-binding Letter of Intent for CIBC to acquire Barclays stake in FirstCaribbean International Bank’s Ltd., Standard & Poor’s Ratings Services confirmed its ‘A-/A-2’ counterparty credit ratings on FirstCaribbean and its ‘BBB+’ rating on FirstCaribbean International Bank (Cayman) Limited guaranteed subordinated floating rate notes. Standard & Poor’s confirmed the outlook for the company as stable, states a press release.

Standard & Poor’s notes: ‘The rating confirmation reflects Standard & Poor’s Ratings Services’ Group Methodology, in which FirstCaribbean will be considered a Strategically Important subsidiary for CIBC once the transaction is completed. The strategically important consideration involves several factors, including CIBC’s future majority ownership of FirstCaribbean (88 per cent), CIBC’s inclination to provide full support financially to FirstCaribbean…

‘The ratings on FirstCaribbean also reflect its important market share in the Caribbean and adequate financial performance.’

The rating is also based on Standard & Poor’s observation that ‘a larger participation from CIBC is not expected to have a material effect on FirstCaribbean management, operations, technology, or day-to-day activities since CIBC has actively participated in the bank’s management since 2002. Furthermore, current management is expected to remain and there are no major changes anticipated in the strategy in the foreseeable future.’

Standard & Poor’s also remains convinced that FirstCaribbean’s current adequate financial profile and strong market presence in the Caribbean will be maintained, hence the outlook for the company remaining stable.

FirstCaribbean’s Chief Executive Officer, Charles Pink, expressed satisfaction at the confirmation: ‘We believed that our Rating should be reaffirmed, having stated that there would be no change in our day-to-day operations and governance. This is a further vote of confidence in FirstCaribbean. We’ve maintained an ‘A-Stable rating since our inception and we are very pleased it’s been confirmed once again.’

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