Thursday 26 November, 2020

Sygnus financed US$10.4 million in private credit for March quarter

Berisford Grey, President and CEO, Sygnus.

Berisford Grey, President and CEO, Sygnus.

Sygnus Credit Investments Limited (SCI) is reporting a record third quarter of investment origination activity.

Its investment in portfolio companies grew by 51.7 per cent to US$47.39 million and the number of portfolio company investments increased to 21 in the third quarter of 2020 from 16 in the comparative period of 2019

In addition, SCI expanded its regional footprint to seven Caribbean territories, up from five the prior quarter, the company revealed in a press release. 

SCI reported record nine-month core revenues of US $3.4 million and core earnings (up 38.4 per cent to US$2.4 Million), but lower net profits (down 33.8 per cent to US$1.3 million) for the period ended March 31, 2020.

The results were driven by a reported net loss in the third quarter ended March 2020, as record investment origination was offset by a number of one-off items, including the conversion of $1.2 billion to USD partly from the proceeds of new JMD debt that was issued.

“SCI core revenues for Q3 March 2020 are up 8.9 per cent to US$1.08 million. This number would have been higher but was impacted by temporary timing differences between the cost of borrowing debt and the revenues earned from using that debt to invest,” stated Jason Morris Executive Vice President & Chief Investment Officer, Sygnus.

He added, “the company made an early exit on an investment for US$10.3 million due to a delay in the use of funds brought on by coronavirus, and as a result, we made less revenues than we otherwise would have, equating to almost one month of revenues. Core earnings for Q3 March 2020 were down 6.7 per cent to US$685,000, primarily due to the factors affecting core revenues.”

SCI has fortified its balance sheet with US$10 million facility in addition to US$10.4 million in dry powder it had at end of Q3 March 2020.

Apart from this, SCI also began negotiations to renew its bank credit facilities totalling US$6.5 million, which means that SCI has no maturing debt over the next 12 months, and doesn't need to worry about repayment of credit facilities in a challenging market. 

“SCI continues to evaluate the impact of COVID-19 on its business and is very confident that its robust risk management strategy, ample liquidity position, low leverage and well-diversified investments in portfolio companies across the region will ensure that it not only successfully protects shareholders’ value but is also positioned to take advantage of the unprecedented investment opportunities that are likely to emanate from this period,” stated Berisford Grey, President and CEO, Sygnus.

Grey added: “As the leader in  regional private credit, SCI will continue to play a critical role in the future growth of its Portfolio Companies and economic recovery across the Caribbean by working closely with Portfolio Companies to navigate this crisis, financing new opportunities with strong downside protection and deepening accessibility to capital through alternative financing.”

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