Wed | Dec 12, 2018

State-owned bank pays off multimillion- dollar bond

Published:Wednesday | March 2, 2016 | 12:00 AM

First Citizens Bank Limited says it repaid a US$175-million bond issued through its wholly owned subsidiary in St Lucia five years ago.

In a full-page newspaper advertisement, the bank said up to their repayment, the bonds were rated by both Moody's Investors Service and Standard and Poor's at Baa2 and BBB+, respectively.

"Given that the First Citizens Group no longer has any bonds issued in the international markets, and in light of the objective for cost containment in the current economic environment, a decision was taken to maintain only one corporate international credit rating at this time," it said.

Last week, Moody's announced that it had withdrawn all ratings assigned to the bank. It said that it had done so "for its own business reasons". First Citizens' deputy chief executive officer, Jason Julien, told the Trinidad Express newspaper that having repaid the bonds, the bank no longer needed two international credit ratings.

"The agencies are not free," said Julien. "They cost on average US$50,000, so we would have had to pay that cost twice ...".

According the press advertisement, the bank said its "capital and balance sheet structure is well positioned to support its business operations in the current economic environment", and that the funds required to pay off the bonds were obtained internally, reflecting "the strength of the financial performance and liquidity of First Citizens".

First Citizen is one of three listed home-based banks. It last traded at TT$35 per share, valuing the company at TT$8.8 billion, which puts it at third place behind Republic Financial, which has a market value of TT$18.2 billion and Scotiabank Trinidad at TT$10.5 billion.