GEISHA KOW­LESSAR-ALON­ZO

S&P Glob­al Rat­ings is warn­ing that the Trinidad Pe­tro­le­um Hold­ings Ltd (TPHL) is breach­ing an ad­min­is­tra­tive covenant re­lat­ed to the re­port­ing of its year-end 2019 au­dit­ed fi­nan­cial state­ments (end­ing Sep­tem­ber 30), which trig­gers the re­port­ing of to­tal debt as short-term.

"Al­though it has pub­lished the fi­nan­cial state­ments of its op­er­at­ing sub­sidiaries, Her­itage Pe­tro­le­um Co Ltd and Paria Fu­el Trad­ing Co Ltd, since 2019, TPHL has been breach­ing one of its ad­min­is­tra­tive covenants re­lat­ed to the pub­li­ca­tion of the group's fi­nan­cial state­ments.

"Giv­en that the fis­cal year in T&T ends Sep­tem­ber 30, the com­pa­ny must have the au­dit­ed fi­nan­cial in­for­ma­tion pub­lished about 150 days af­ter the end of pe­ri­od," S&P ex­plained.

It added that as of Sep­tem­ber 30, 2020, the non-com­pli­ance re­sult­ed in the clas­si­fi­ca­tion of its to­tal debt in the bal­ance sheet, for fi­nan­cial re­port­ing pur­pos­es, as short term (fis­cal year 2020).

"We don't ex­pect a po­ten­tial ac­cel­er­a­tion on its debt be­cause the com­pa­ny hasn't re­ceived a de­c­la­ra­tion by lenders that debt be due and payable, and we ex­pect it could meet the pub­li­ca­tion of the fi­nan­cial state­ments in the com­ing weeks.

"How­ev­er, in our view this still re­flects neg­a­tive­ly on its man­age­ment and gov­er­nance as­sess­ment at the hold­ing lev­el," S&P fur­ther de­tailed.

Ad­di­tion­al­ly, the rat­ing agency added that TPHL faces near-term ma­tu­ri­ties that could pres­sure its liq­uid­i­ty if not ad­dressed with­in the next four months.

Hence, S&P has low­ered the cred­it rat­ing on TPHL to 'B+' from 'BB' and the is­sue-lev­el rat­ing to 'B+' from 'BB' on its 9.75 per cent se­nior se­cured notes due 2026.

At the same time, the rat­ing agency low­ered its is­sue-lev­el rat­ing to 'B' from 'BB-' on its 6.00 per cent se­nior un­se­cured se­nior notes due 2022, giv­en high­er sub­or­di­na­tion.