Caribbean Utilities Company, Ltd.: Rating Report

On January 30, 2018, DBRS Limited (DBRS) confirmed the Issuer Rating and Senior Notes rating of Caribbean Utilities Company, Ltd. (CUC or the Company) at A (low) with Stable trends. The confirmations reflect CUC’s stable financial performance, strong 2017 key credit metrics and a stable regulatory system in Grand Cayman. All credit metrics for the nine months ended September 2017 (9M 2017) were strongly supportive of CUC’s current ratings. The current ratings reflect: (1) a supportive regulatory environment that allows the Company to earn good returns on its rate base and to generate predicable cash flow; and (2) CUC having no exposure to commodity price risk and only facing modest regulatory lag associated with the recovery of fuel and non-fuel costs as well as capital spending. The ratings also incorporate the Company’s exposure to hurricane risk and the relatively small size of its operations and customer base.