Thread: S&P downgrades The Bahamas, revises Jamaica outlook

S&P downgrades The Bahamas, revises Jamaica outlook - Caribbean360

Jamaica’s Ministry of Finance said the revised outlook relates to problems completing reforms in line with its medium-term IMF targets; The Bahamas said it wasn’t surprised by the downgrade.
NASSAU, Bahamas, Wednesday November 2, 2011 - International rating agency Standard and Poors (S&P) has lowered the crediting rating for The Bahamas, while revising Jamaica’s outlook from stable to negative.

The Bahamas’ credit rating slipped from BBB+/A-2, to BBB/A-3 and its transfer and currency convertibility assessment from A- to BBB+.

However, S&P maintained Jamaica's B- long-term foreign currency rating.

The Hubert Ingraham-led administration indicated that it was not surprised by the downgrade since the credit agency has changed its methodology to place greater emphasis on diversification and growth prospects.

“Given The Bahamas’ economic concentration on tourism and financial services for more than 50 years and given its limited growth prospects in the current challenging global economic environment, it seemed likely that a rating down grade would follow this change in methodology,” the Ministry of Finance said in a statement.

“…The government of The Bahamas remains focused on stimulating economic growth through inward direct foreign investment, increasing support for small and medium size business development, improving the domestic environment for doing business and strengthening the productivity of The Bahamas’ workforce.”

Meanwhile, Jamaica’s finance ministry said S&P’s revised outlook for the country is largely due to the non-completion of reforms related to its medium-term targets under the International Monetary Fund (IMF) standby agreement.

The ministry said the non-completion of the reforms has led to delays in Jamaica's last three quarterly reviews under the agreement.

"It should be noted that discussions with the IMF continue as the country seeks to secure the agreed medium-term economic plan which will ensure both fiscal and debt sustainability," the minister stated.
It also noted that the credit rating agency has said the achievement of these conditions would lead to an improvement of Jamaica's credit worthiness.



Read more: S&P downgrades The Bahamas, revises Jamaica outlook - Caribbean360

Interesting post, Mike!

Some of these bonds from the Bahamas and Jamaica have a 9% to 10% yield when held to maturity.

I don't speculate on foreign bonds.