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This from Caribbean Net News:
Jamaica debt rating cut by Moody's
Published on Thursday, March 5, 2009 Email To Friend Print Version
By Lester Pimentel
NEW YORK, USA (Bloomberg): Jamaica’s debt rating was lowered one level by Moody’s Investors Service, which said the country’s budget deficit and debt load will increase amid the global economic slump.
New York-based Moody’s downgraded Jamaica’s credit rating to B2, five levels below investment grade, from B1. The outlook for the rating is stable, Moody’s said in a statement.
Jamaica’s budget shortfall may swell to 6 percent of the island nation’s gross domestic product this year amid declining tourism and remittances from abroad, a major source of foreign exchange, Moody’s said. Public debt may equal more than 100 percent of Jamaica’s GDP, according to Moody’s.
“Because of a high debt burden and large fiscal and external imbalances, Jamaica is facing these significant challenges from a position of relative weakness,” Alessandra Alecci, a Moody’s analyst in New York, wrote in the statement. “The severity of the global downturn is taking a toll on the government’s finances.
The extra yield investors demand to own Jamaica’s dollar bonds instead of US Treasuries has more than doubled to 10.5 percentage points from 4.08 percentage points in August, according to JPMorgan Chase & Co. In December, the spread swelled to 11.89 percentage points, the biggest since at least October 2007, when JPMorgan began tracking the country’s debt.
Jamaica’s bonds lost 23 percent last year, according to Merrill Lynch & Co. indexes.
“The government’s finances and the external position are simply too weak to face a shock of this magnitude without a worsening of credit risk,” Alecci said.
Jamaica debt rating cut by Moody's
Published on Thursday, March 5, 2009 Email To Friend Print Version
By Lester Pimentel
NEW YORK, USA (Bloomberg): Jamaica’s debt rating was lowered one level by Moody’s Investors Service, which said the country’s budget deficit and debt load will increase amid the global economic slump.
New York-based Moody’s downgraded Jamaica’s credit rating to B2, five levels below investment grade, from B1. The outlook for the rating is stable, Moody’s said in a statement.
Jamaica’s budget shortfall may swell to 6 percent of the island nation’s gross domestic product this year amid declining tourism and remittances from abroad, a major source of foreign exchange, Moody’s said. Public debt may equal more than 100 percent of Jamaica’s GDP, according to Moody’s.
“Because of a high debt burden and large fiscal and external imbalances, Jamaica is facing these significant challenges from a position of relative weakness,” Alessandra Alecci, a Moody’s analyst in New York, wrote in the statement. “The severity of the global downturn is taking a toll on the government’s finances.
The extra yield investors demand to own Jamaica’s dollar bonds instead of US Treasuries has more than doubled to 10.5 percentage points from 4.08 percentage points in August, according to JPMorgan Chase & Co. In December, the spread swelled to 11.89 percentage points, the biggest since at least October 2007, when JPMorgan began tracking the country’s debt.
Jamaica’s bonds lost 23 percent last year, according to Merrill Lynch & Co. indexes.
“The government’s finances and the external position are simply too weak to face a shock of this magnitude without a worsening of credit risk,” Alecci said.
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