That Moody’s ratings agency has analysts questioning Alorica’s longevity:
STANLEY MOTTA Limited, which owns the complex at 58 Half-Way Tree Road, sought to quell concerns about the credit rating of global tenant Alorica, which occupies the majority of the complex, arguing that it is stable and pays rent on time.
Three of the five buildings at the complex will be occupied by Alorica, the third largest business process outsourcing firm from the United States with more than 140 locations globally.
“We looked at their accounts and did our due diligence. We feel very comfortable with their growth strategy. They will be investing a lot of money here and they religiously pay the rent on time. We are very pleased to have them here,” said Chairman of Stanley Motta Melanie Subratie at an investors roadshow on Thursday, a day ahead of the Stanley Motta IPO, which opens for subscription today, July 6.
The issue was raised by an analyst representing a pension fund, while other analysts followed up with queries on the contingencies were Alorica to pull out of the 58HWT tech park.
Stanley Motta has secured long-term leases with its tenant for the next five years.
“It is a well-diversified company,” insisted Herbert Hall, vice-president of investment banking at NCB Capital Markets, the broker of the IPO.
Alorica has a rating of B1 stable from the rating agency Moody’s. The agency argued that Alorica’s latest quarter showed weak operating performance which hurt its cash flow and liquidity. However, the company’s ratings is not currently affected because it maintains good free cash flow and is pursuing a credit facility amendment that will diminish covenant violation risk, the ratings agency said.
Stanley Motta is a Musson Group subsidiary, held by Musson Jamaica and Harbour Street Properties.
The IPO, at $5.31 per share, is expected to raise $4 billion.