Knowledge

Author: MacDonald Gomo

Category:

Date: 16 October 2019

Trustco Group Holdings ratings upgraded to B+(NA)/B(NA)

The JSE-listed financial services group Trustco Group Holdings reported a successful completion of its formal debt term-extension process with the lender group which reflects a positive outlook and provides clarity of funding for the business going forward.

The successful term-extension unlocks potential new funding for Trustco Finance. Trustco Finance works in parallel with group company, Institution of Open Learning (IOL) an accredited tertiary learning institution leveraging technology to provide remote learning on a part-time basis. Trustco Finance is the largest part of the Trustco’s banking and finance segment. The other part of the segment is Trustco Bank which has an emerging product suite in middle-class mortgages and SME-lending. Following the successful term-extension, international rating agency GCR increased Trustco’s rating to B+.

The bulk of Trustco Group Holding’s activities are involved in high development impact segments. Trustco Life, Trustco’s life insurance business focusses on insurance products for the lower LSM Namibians and is the largest insurer in Namibia by lives insured. Trustco Insurance provides a range of products for SMEs and micro-entrepreneurs, including its flagship Legal Shield product. Trustco’s property business focuses on developments for the underserved middle-class market.

In addition to Trustco’s financial services, education and property business, Trustco Resources is the most recent leg of the overall group and an important and uncorrelated leg of the group’s credit story. Trustco secured the mining licence for the flagship business in the segment, Meya Mining in Sierra Leone. Trustco expects the business to be a meaningful cashflow contributor and a ballast to the group overall. The group’s strategy is to raise capital for the individual business lines separately, in order to provide lenders with certainty of use of the funds, while providing parent guarantees so that investors benefit from the diversification of the group

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