JM | Jul 3, 2022

Fitch upgrades NCB’s future flow transactions

/ Our Today


Ratings address timely payment of interest and principal on a quarterly basis

Fitch Ratings’ headquarters in New York.

Durrant Pate/Contributor

International credit ratings agency Fitch has upgraded the issue-specific ratings assigned to Jamaica’s largest commercial bank, National Commercial Bank (NCB).

The ratings covers all of NCB’s outstanding series of notes issued by Jamaica Merchant Voucher Receivables Limited, which has been upgraded to  ‘BBB-‘, up  from BB+ and Jamaica Diversified Payment Rights Company upgraded to ‘BB+’ coming from’ and ‘BB’. The Rating Outlook on the notes remains Stable.

Jamaica Merchant Voucher Receivables Limited is backed by future flows due from Visa International Service Association (Visa) and MasterCard International Incorporated (MasterCard) related to international merchant vouchers (MV) acquired by NCB in Jamaica.

Jamaica Diversified Payment Rights Company (JDPR) is backed by existing and future USD-denominated diversified payment rights (DPRs) originated by NCBJ. DPRs are defined as electronic or other messages used by financial institutions to instruct NCB to make payment to a beneficiary.

The majority of DPRs are processed by designated depository banks (DDBs) that have executed agreements obligating them to send payments to accounts controlled by the transaction trustee. Fitch’s ratings address timely payment of interest and principal on a quarterly basis.

Future flow debt size 

Based on Fitch’s assessment NCB’s future flow debt size not a constraint. NCB’s total future flow debt represents 6.6 per cent of the bank’s total funding and 17.0 per cent of non-deposit funding when considering the current outstanding balance on both programs (US$375.6 million) as of May 2022.

NCB Group’s The Atrium in New Kingston.

Although Fitch considers these ratios to be moderate however, in small terms, it is enough to allow for the maximum uplift. Fitch reserves the maximum uplift for originators rated at the lower end of the rating scale.

Most recently, Fitch says flows remained resilient while experiencing the macroeconomic impacts from the coronavirus pandemic, and remained sufficient to cover debt service obligations.

Moreover, the transaction can withstand a drop in flows of approximately 85.5 per cent and still cover the maximum quarterly debt service obligation, further highlighting the strength of the flows.


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