CBR
search
Economy

A busy street in Bridgetown, the capital of Barbados, before the onset of the coronavirus pandemic. (File photo)

Rating agencies upgrade Jamaica and Barbados

A busy street in Bridgetown, the capital of Barbados, before the onset of the coronavirus pandemic. (File photo)

Standards and Poor’s (S&P) has raised its long- and short-term foreign currency sovereign credit ratings on Barbados to ‘B-/B’ from ‘SD/SD’ (selective default).


At the same time, S&P Global Ratings assigned its ‘B-‘ issue-level foreign currency rating to Barbados’ long-term foreign currency debt issued in its debt exchange.

Also, Moody’s Investors Service (“Moody’s”) on December 11th upgraded the Government of Jamaica’s long-term issuer and senior unsecured ratings to B2 from B3, and senior unsecured shelf rating to (P)B2 from (P)B3. The outlook has been changed to stable from positive.

“The stable outlook reflects Moody’s expectations that the improvements in Jamaica’s credit profile, which have improved macroeconomic stability and put debt on a downward trend, will be sustained.”

– Vice President – Senior Analyst Sovereign Risk Group, David Rogovic

Both Caribbean countries have made upgrades to their economies that the rating agencies approve of.   And the approval of rating agencies is critical to assure investors that when they buy debt from these Caribbean nations, they will not only be repaid but earn interest on the money lent.

According to the press release issued by Moody’s, the improved ratings were based on the following:

• Jamaica’s strong commitment to fiscal consolidation and structural reforms portends to continued decline in government debt and sustained improvements in economic resiliency

• Improving debt structure limits risks associated with a high levels of government debt

According to the press release issued by, David Rogovic, Vice President – Senior Analyst Sovereign Risk Group, “The stable outlook reflects Moody’s expectations that the improvements in Jamaica’s credit profile, which have improved macroeconomic stability and put debt on a downward trend, will be sustained. The stable outlook also reflects the structural credit constraints due to the country’s small size, sizeable economic concentration in the tourism industry, low economic growth and vulnerability to external shock.”

In the case of Barbados, the S&P improved their ratings because, according to their press release, “Barbados exchanged approximately US$531 million in new 2029 bonds and US$32 million in past-due interest bonds to holders of its U.S. dollar bonds that have been in default since 2018, of which approximately US$677 million, plus accrued interest, was outstanding. It notes this exchange will apply to holders of Barbados’ English law-governed U.S. dollar bonds, certain Barbados law-governed U.S. dollar bonds, and a U.S.-dollar loan agreement.”  This according to S&P means that, “the stable outlook balances its view of the Barbados   Government’s commitment to a fiscal and institutional adjustment with the economic and political challenges of doing so.”  S& P also notes that, “over the next 12-18 months the government will continue to implement policies that achieve fiscal consolidation and instill institutional safeguards, while strengthening macroeconomic stability.”