Following its first three years as a listed company, Sygnus Credit Investments Limited (SCI) will be looking to the next phase of its growth as it exceeds its 2023 projections two years earlier than planned.

SCI had told investors at its 2020 annual general meeting that it had anticipated to hit a US$100-million private credit portfolio by 2023. At the end of the first quarter ending September 30, 2021, the fair value of SCI’s portfolio totalled US$88.76 million with the company raising US$27.5 million in October from a private placement. This portfolio was spread across 33 companies and seven territories with Jamaica, St Lucia and the SSS Islands (Saba Sint Eustatius Sint Maarten) making up 79 per cent of the regional exposure.

“Effectively what’s happening now is that the business is beginning to scale. We are going through the metamorphosis to scale it to which we spoke when we were doing the APO. We want to improve the credit rating. At the moment, SCI doesn’t have a lot of fee income. Those are some of the things that on a going forward basis, we will start to generate that kind of supplemental income that will help to bolster the earnings and credit rating by bringing down interest costs,” stated chief investment officer of Sygnus Capital Limited Jason Morris at a recent analyst briefing. SCI was assigned jmBBB by the Caribbean Information and Credit Rating Services Limited.

SCI saw its total investment income grow by 39 per cent to a record US$1.82 million amid greater deployment of capital in the last year. Even with higher operating expenses of US$735,261, SCI’s net profit rallied by 89 per cent to US$1.51 million. The company expects to hit the US$8 million total investment income target during the current financial year based on the growth of its portfolio.

When questioned by an analyst on the company’s need to raise more capital, Morris responded, “We will raise additional debt as the need arises. We know our maturity profile in terms of liabilities and we are already far advanced in managing that in terms of additional debt raises to meet those needs.”

Morris noted that SCI should be looked at as a regional company and can source capital from other capital markets beyond Jamaica as it scales.

Less than 10 per cent of SCI’s portfolio is in Jamaican dollars with Morris assuring that it wouldn’t surpass 20 per cent. He also confirmed that SCI’s non-performing ratio would return below 5 per cent shortly and that the portfolio was over collateralized. The ratio currently stands at 6.1 per cent with US $4.6 million under monitoring.

SCI’s debt to equity stood at 0.35 times which is below its 1.25 times target while debt to total assets was at 0.25 times. This leaves SCI with a lot of space to raise additional capital. SCI’s total assets stood at US$93.89 million with equity at US$66.69 million. Total debt for SCI was US$23.43 million.

Private credit demand has sharply risen regionally and globally as companies look to capitalise on the situation brought on by the novel coronavirus pandemic. One company listed on the Jamaica Stock Exchange recently received a US$8-million loan as per its 2021 audited financials.

“We are pleased with the continuous growth of SCI’s portfolio and its record-breaking Q1 performance. The impact of the global Covid-19 pandemic on the Caribbean region and on middle- market businesses is ongoing, and the trajectory of the regional economic recovery remains uncertain, despite apparent green shoots of recovery. However, SCI’s private credit portfolio remains resilient and well-positioned to navigate the volatility of this ongoing pandemic,” stated Berisford Grey, co-founder, president and CEO, Sygnus Group.