Fitch upgrades Sagicor Financial

Fitch Ratings said it upgraded Sagicor Financial Corp. Ltd.'s long-term issuer default rating to BB- from B, along with its senior debt ratings to B+ from B with recovery rating of RR5.

The outlook is stable.

The upgrades reflect a recent upgrade of Jamaica's sovereign ratings, Fitch said.

Jamaica's economic risks factor heavily into the company's rating due primarily to the country's significant earnings contribution and capital relative to the consolidated group, the agency said.

More than half of Sagicor Financial's below investment grade bond portfolio consists of Jamaican sovereign debt, Fitch explained.

The ratings also consider the completed restructuring and exchange of the domestic sovereign debt of Barbados in the fourth quarter of 2018, which accounts for the bulk of Sagicor's exposure to Barbados' sovereign debt in its investment portfolio, the agency said.

The ratings also reflect the challenging operating and economic environments of two of the main insurance subsidiaries domiciled in Jamaica and Barbados, Fitch said.

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