Fitch Affirms Jamaica Diversified Payment Rights Company (NCBJ)
CHICAGO -- January 28, 2013
Fitch Ratings has taken the following rating actions on the notes issued by
Jamaica Diversified Payment Rights Company (National Commercial Bank Jamaica
--Series 2006-1 notes due 2013 affirmed at 'BB';
--Series 2007-1 notes due 2015 affirmed at 'BB'.
The Rating Outlook is Stable.
The transaction is a securitization of existing and future U.S.
dollar-denominated diversified payment rights (DPRs) originated by National
Commercial Bank Jamaica Ltd. (NCBJ). DPRs refer to electronic payment orders
intended for payment to third party beneficiaries via NCBJ, related to trade
payments, workers remittances, and foreign direct investment. Upon generation
of the payment orders, the trust will have rights to the DPRs through accounts
maintained with designated depositary banks (DDBs).
The bank's DPR flows increased slightly (3%) in 2012 when compared to 2011 and
are above pre-crisis levels. DDB flows have also increased (5%) over 2011. On
average, over 97% of all collections currently come via DDB transactions.
Coupled with a deleveraging of the program the increased DDB flows have led to
higher coverage levels.
Quarterly coverage levels for the program during 2012 averaged approximately
76 times (x) maximum quarterly debt service. As of December 2012, current
monthly debt service coverage ratio (DSCR) is 145.7x and quarterly DSCR is
The current outstanding balance of the debt is approximately $22 million.
Series 2006-1 is expected to pay in full in March 2013. Series 2007-1 is
expected to mature in June 2015.
NCBJ is the largest bank in Jamaica in terms of assets with more than 40%
market share of the commercial banking system in recent years. Based on its
important position in the Jamaican banking system and its corresponding role
in the local economy, the bank has a going concern assessment (GCA) score of
On Jan. 25, 2013 Fitch affirmed NCBJ's foreign currency and local currency
Issuer Default Ratings (IDRs) at 'B-' and revised the Outlook to Negative from
Stable. The Outlook revisions on NCBJ's IDRs are in line with a similar action
that Fitch took on Jamaica's sovereign ratings on Jan. 18, 2013, given the
bank's exposure to the government of Jamaica and the potential for a more
challenging operating environment.
While NCBJ's Outlook was revised to Negative, the DPR program's Outlook
remains Stable due to the stable performance of the transaction, high level of
coverage, and low level of outstanding future flow debt. According to Fitch's
Future Flow Securitization Rating Criteria, NCBJ's GCA of 'GC1' allows for a
rating differential of up to six notches. Fitch will continue to monitor the
sovereign and bank environments and review the transaction accordingly.
Additional information is available at www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Future Flow Securitization Rating Criteria' (June 19, 2012);
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Jamaica' (Feb. 10, 2012);
--'National Commercial Bank of Jamaica Limited (April 26, 2012).
Applicable Criteria and Related Research:
Future Flow Securitization Rating Criteria
Global Structured Finance Rating Criteria
National Commercial Bank of Jamaica Limited (NCBJ)
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