The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A BISX-listed insurer is due to ultimately receive just over $6.5m from last year's sale of Ansbacher (Bahamas) to Deltec Bank & Trust.

Colina Holdings (Bahamas) audited 2022 financial statements, which have just been released, reveal that the life and health insurance holding vehicle is receiving less for its collective 19 percent stake in Sentinel Bank & Trust, Ansbacher's immediate parent, than the initial $8m capital investment it made more than 13 years ago.

The BISX-listed entity, and its Colina Insurance Company subsidiary, invested $3m and $5m, respectively, for 7 percent and 12 percent equity stakes in Sentinel in July 2009. A Colina Holdings (Bahamas) spokesman, in brief replies to Tribune Business questions, confirmed that the near-$6.5m produced by the Deltec sale relates to their combined 19 percent holding and not just the parent's 7 percent.

"Yes, the $6.5m does relate to the 19 percent stake," they said. Colina Holdings (Bahamas) financials, affirming that the Deltec Bank & Trust deal closed on March 31 last year, said: "At the closing of the Ansbacher Bahamas transaction, the company received a cash payment of $6.021m. Management has estimated that a further $491,331 would be received. To date, the company has received $84,373 of the projected payments."

The audited financials were signed-off by Colina Holdings (Bahamas) chairman, Terry Hilts, and executive vice-chairman, Emanuel Alexiou, on April 6, 2023. No explanation was provided in the notes for why just 17 percent of the $491,331 has been paid to-date or why the full sum was not paid over to the BISX-listed insurer immediately upon the deal's closing and receipt of the purchase price from Deltec.

The total $6.512m due to Colina Holdings (Bahamas) is almost identical to its combined share of Sentinel Bank & Trust's net assets, and "other comprehensive income through revaluation reserve", as at March 31, 2022, when the sale to Deltec Bank & Trust closed. Together, the insurer's net share of the assets and revaluation reserve was pegged at $6,511,567.

Using a back-of-the-envelope calculation, and employing Colina Holdings (Bahamas) 19 percent total stake and the $6.512m received for it, gives a potential sale price of around $34.276m that was paid for Ansbacher (Bahamas) by Deltec.

This, though, could not be confirmed. However, the latter figure is almost identical to the $34.271m net asset value assigned to Sentinel Bank & Trust at the end-March 2022 sale date. Sentinel's net assets, or worth, was shown as having decreased by almost $25m or 42 percent during the three months between 2021 year-end and the sale closing, having stood at $59.184m at December 31, 2021.

During that same three-month period, while Sentinel's assets had expanded by $46.5m or 9.4 percent, increasing from $495.446m to $541.974, this was outpaced by the rise in liabilities. These grew by almost $71.5m in just three months, expanding by 16.4 percent to $507.703m from $436.262m at year-end December 2021.

This also had the effect of decreasing Colina Holdings (Bahamas) share of Sentinel's net assets, and revaluation reserve, from $11.245m at year-end 2021 to $6.512m. For the 2021 full-year, Sentinel Bank & Trust - via its Ansbacher (Bahamas) subsidiary - produced total comprehensive income of $787,861 on revenues worth $26.858m.

However, for the three months to end-March 2022 immediately prior to the Deltec deal's closing, Sentinel generated a $1.32m comprehensive loss on revenues of $5.959m. Sentinel Bank & Trust acquired Ansbacher (Bahamas) in May 2009, with the two institutions merging just two months later and retaining the latter's name.

"During 2013, the company (Colina Holdings Bahamas) and Colina (Insurance Company) made additional capital contributions of $124,473 and $213,382 respectively in Sentinel Bank & Trust," the 2022 audited financials added. "The funds were used by Sentinel Bank & Trust's subsidiary, Ansbacher Bahamas, to partially fund the acquisition of Finter Bank and Trust (Bahamas).

"Colina Holdings (Bahamas) and Colina’s percentage ownership in Sentinel Bank & Trust after the capital contribution remained at 7 percent and 12 percent, respectively. The company made additional investments in Sentinel Bank & Trust and Ansbacher Bahamas during 2015. However, these additional investments did not impact the company’s consolidated percentage ownership in Sentinel Bank & Trust nor its classification as an equity-accounted investee."

Meanwhile, Colina Holdings (Bahamas) 2022 audited financials revealed that its Colina Insurance Company subsidiary took out a $30m CIBC FirstCaribbean International Bank (Bahamas) loan to finance the purchase of Bahamas government bonds.

While not confirmed, Tribune Business sources suggested that the bonds purchased were the Government's US dollar-denominated external foreign currency variety, with Colina joining other investors in taking advantage of the Central Bank's decision to late last year temporarily waive the 5 percent investment currency premium to incentivise Bahamians and residents.

The financials show Colina Insurance Company's bond purchase took place on January 27, 2023, just four days before the window in which to consummate such deals ended. "The Board of Directors, by resolution dated November 16, 2022, authorized Colina Insurance to enter into a non-revolving demand instalment loan facility with CIBC FirstCaribbean for $30m for the purpose of purchasing Government of The Bahamas bonds," the statements reveal.

"The loan carries an interest rate of Bahamian Prime minus 0.25 percent per annum with an interest rate floor of 4 perecnt and will be repaid by regular semi-annual principal payments of $1.5m each, plus semi-annual interest payments with any outstanding principal and interest included with the last scheduled payment.

"This loan is collateralised by a pledge of Colina’s holdings in Class C of the CFAL Global Bond Fund, in the amount of US$60m, and is subject to a minimum value of twice the amount outstanding on the facility at all times. The loan agreement is dated January 10, 2023, and the proceeds of the loan facility received on January 27, 2023, and immediately used by Colina for the purchase of Bahamas Government bonds."

The Colina Holdings (Bahamas) spokesperson said of the deal: "The company’s policy is not to disclose key details of its investment strategy. However, the return on investment sufficiently covers the rate on borrowings."