The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BISX-listed Colina Holdings has taken a $15 million credit facility from FirstCaribbean International Bank (Bahamas) and re-lent it - on the same terms and conditions - to its offshore bank affiliate.

The 2015 full-year financial statements for the BISX-listed life and health insurance holding company reveal that the ‘on-lending’ to Ansbacher (Bahamas) was partially secured by assets pledged by their parent, A F Holdings.

The details, disclosed in the financial statements’ note 14, show that Colina Holdings (Bahamas) was the original borrower of the $15 million advanced by FirstCaribbean in June 2015.

“The proceeds of the FirstCaribbean International Bank (Bahamas) loan were immediately used by the company [Colina Holdings] to issue a loan on the exact same interest and repayment terms to its affiliate, SBL Ltd,” the BISX-listed insurer’s financial statments disclose.

Both Colina Holdings and SBL Ltd, which is the immediate holding entity for Ansbacher (Bahamas), are paying interest at a rate equivalent to three-month LIBOR plus 2 per cent per annum.

It is unclear from the financial statements why FirstCaribbean International Bank (Bahamas) could not lend the $15 million directly to Ansbacher (Bahamas), and the loan re-routed through Colina Holdings (Bahamas) instead.

The credit facility appears to be some kind of ‘bridging loan’, given that $5 million worth of principal has to be re-paid to FirstCaribbean International Bank (Bahamas) by June 24 this year. The remaining $10 million is due on Christmas Eve 2016.

“The FirstCaribbean International Bank (Bahamas) loan is collateralised by a pledge of assets owned by AF Holdings, along with guarantees by both AF Holdings and SBL,” the Colina Holdings (Bahamas) financials state.

“The terms of the FirstCaribbean International Bank (Bahamas) loan include covenants to maintain a maximum loan to asset value ratio of 30 per cent, and a minimum total equity of $150 million.”

Colina Holdings (Bahamas) added that it has consistently complied with these terms. The ‘re-lend’ to Ansbacher (Bahamas) has seemingly been partially guaranteed, though, by their joint parent, A F Holdings.

That is the former Colina Financial Group (CFG) entity, now owned by Emanuel Alexiou and Anthony Ferguson, and which was renamed AF Holdings after their bitter split - and protracted court battle - with former partner, James Campbell.

Colina Holdings (Bahamas) and its main subsidiary, Colina Insurance Company, own a collective 19 per cent of SBL’s (Ansbacher) equity, having bought in for a total $8 million in July 2009.

The 2015 financial statements confirm that both companies “made additional investments” in SBL and Ansbacher (Bahamas) in 2015, although their equity holdings did not change.

Colina Holdings (Bahamas), though, did make a $5 million investment by purchasing a preference share issued by Ansbacher (Bahamas) in December 2015.

The financials show that the value of Colina Holdings (Bahamas) investment in SBL Ltd increased by 29.6 per cent year-over-year in 2015, rising from $6.038 million to $7.829 million.

And 2015 also appears to have been a very profitable year for Ansbacher (Bahamas)/SBL, given that the BISX-listed insurer’s ‘share of profits’ more than doubled year-over-year - from $679,651 to $1.79 million.

SBL’s net income jumped from $4.077 million to $9.839 million, with revenues up from $18.296 million to $26.072 million.

Elsewhere, the financial statements also revealed that Colina Insurance Company entered into a $35 million “structured repurchase transaction” with Deutsche Bank’s London office on December 7, 2015.

In return for “funding” Colina Insurance with that sum, at an annual fixed interest rate of 4.85 per cent, the life and health insurer has pledged bonds worth $45.7 million as collateral.

These bonds are held via Colina Insurance’s interest in the CFAL Global Bond fund operated by its broker/dealer affiliate. It has “been granted all rights and obligations over all assets and liabilities” under the fund’s Class C shares.

Colina Insurance has to repay $7 million to Deutsche Bank every year, with the first payment due on December 10, 2016. The $35 million is due to be repaid entirely by end-2020, with Deutsche Bank releasing a portion of the pledged bonds every time payment is received.

“If the value of the pledged bonds falls by more than $250,000, Colina will be required to post the shortfall with Deutsche Bank in cash or cash equivalents within one business day,” the financials state.

Colina Holdings (Bahamas) saw net income increase by 14.4 per cent in 2015, its bottom line growing by more than $2 million to $16.192 million for the 12 months to end-December 2015.

With National Health Insurance (NHI) and associated uncertainty on the horizon, Colina Holdings (Bahamas) will likely be relieved to have enjoyed a more balanced contribution to 2015 profits from its life insurance segment.

In prior years, the company’s health business has been responsible for generating the bulk of net income.

However, life insurance profits almost tripled year-over-year in 2015, jumping from $1.825 million to $5.218 million. Health, while still strong, fell from $13.115 million to $8.775 million - a 33 per cent decrease.