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CariCRIS reaffirms ‘adequate creditworthiness’ ratings to Sterling (Saint Lucia) Holdings Limited

• CariBBB+ (Regional Scale Foreign Currency)
• CariBBB+ (Regional Scale Local Currency)

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the assigned issuer/corporate credit ratings of CariBBB+ (Foreign and Local Currency Ratings) on the regional rating scale to Sterling (Saint Lucia) Holdings Limited (SHL or the Group).

 These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean, is adequate. CariCRIS has also assigned a stable outlook on the ratings. The stable outlook is based on the high likelihood that SHL will continue to be profitable over the next 12-15 months.

This is expected to be supported by higher interest and fee income stemming from increased marketing activities, despite the resultant uptick in operating expenses. The Group is also anticipated to maintain adequate capitalisation and liquidity metrics over the period.

The ratings are underpinned by SHL’s position as an emerging player in the securities industry in the Caribbean, supported by good customer service. The Group’s good asset quality, underpinned by a diverse portfolio of earning assets, and sound financial performance, buttressed by continued profitability, further bolsters the ratings. The ratings are also supported by its favourable capitalisation and liquidity ratios and sound risk management practices that adequately support the Group’s strategic objectives.

Nonetheless, the Group’s sovereign concentration risks together with its funding base, which is characterised by high concentration in short-term instruments, and persistent negative liquidity gaps in the below 1-year bucket, constrain the ratings.

Factors that could, individually or collectively, lead to an improvement in the Ratings and/ or Outlook include:

• Top 10 investment exposure reducing to less than 30% over 2 consecutive periods.
• Net Interest spread above 2.6% for 3 consecutive years.
• Leverage ratio below 3 times for 2 consecutive years.
• Total earning assets/total interest-bearing liabilities above 1.5 times for 2 consecutive years.
• TNW/Total Assets increases above 20% for another year.
• Improvement in the liquidity gap ratio below 35% for 2 consecutive years.

Factors that could, individually or collectively, lead to a lowering of the Ratings and/ or Outlook include:

• Increase in non-investment grade fixed income assets above 30%.
• Inability of SAM to meet capital adequacy regulatory requirements in Jamaica financial services industry.
• Decrease in asset yield and/or increase in funding costs leading to a compression in the net interest spread below 1% for 2 consecutive years.
• A deterioration in the cost-to-income ratio above 40% for another year.
• TNW/Total Assets below 10% for 2 consecutive years
• A deterioration in the liquidity gap ratio above 50% sustained for 2 years.

Sterling (Saint Lucia) Holdings Limited (SHL or the Group) was incorporated in Saint Lucia in October 2004 under the International Business Companies Act 1999. The Group was created as a holding company for its 2 wholly owned subsidiaries: Sterling Asset Management (SAM) and Sterling Asset Management International (SAMIL) (Chart A). SHL is wholly owned by Mr. Charles Ross, President and Chief Executive Officer (CEO) of the Group.

Incorporated in September 2000, SAM is a licensed securities dealer in Jamaica. It was created to provide innovative investment options for Jamaican investors and the Caribbean diaspora. 

In 2003, SAM expanded its product offerings to include investment management services through the launch of Sterling Global Funds (SGF), the first US $ denominated mutual fund in Jamaica. In 2012, SAM launched Sterling Investments Limited (SIL), from which SAM earns an investment manager fee. SIL primarily invests in corporate, municipal and sovereign bonds and is listed on the Jamaica Stock Exchange (JSE). 

SAM currently offers a suite of mutual funds, short-term investments1, global fixed income securities and personalised investment planning services. Furthermore, SAM is regulated by the Financial Services Commission (FSC) in Jamaica. SAMIL, incorporated in November 2004, is a registered securities investment company operating in the Cayman Islands and is regulated by the Cayman Islands Monetary Authority (CIMA)

 SAMIL offers a similar suite of products as SAM, with the exception of investment management services. SAMIL has two subsidiaries: Sterling Finance St. Lucia (SFL) and Sterling Development Limited (SDL), which it owns 100% and 69% respectively. SFL operates as the vehicle through which the Group offers promissory notes to investors, while SDL’s principal activity is holding shares in development projects.

SHL primarily derives its revenues from SAMIL, where the majority of the Group’s assets are domiciled, contributing approximately 92.3% of total revenue over the last 3 years (FY2023-FY2025)

As at March 2025, the Group’s consolidated asset base stood at US$259.8 million, and over the last 3 years, total income and profitability averaged US $9.9 million and US $6.1 million, respectively.