The Trinidad-based Caribbean Information and Credit Rating Services Limited (CariCRIS) Monday said it has upgraded the regional scale local currency rating of the Barbados government from CariD (Default) to CariBB, with a stable outlook.
“We however maintain the regional scale foreign currency rating of CariD (Default) on the country’s foreign currency denominated debt,” it said in a statement, noting that the rating indicates that the level of creditworthiness of the Barbados government, adjudged in relation to other rated obligors in the Caribbean, is below average.
“Our decision to upgrade the rating on the local currency debt is driven by the closure of the exchange offer for domestic (Barbados dollar-denominated) debt. This marks the successful completion of the restructuring of BDS$11.9 billion (One Barbados dollar=US$0.50 cents0 in Barbados dollar-denominated claims on the government of Barbados and its public sector.”
CariCRIS, a regional rating agency, said the restructuring is a central plank of the government’s comprehensive debt restructuring programme and the Barbados Economic Reform and Transformation (BERT) Plan.
“We have maintained our rating of CariD on the foreign currency debt as negotiations with foreign debt holders are not yet concluded. Upon successful completion of these negotiations, we will similarly revise up our ratings on the country’s foreign currency debt,” CariCRIS added.
Last week, the Mia Mottley government announced that it had put a temporary freeze on borrowing as it reported an improvement in the island’s economic position.
“Over the next four years the Barbados government will not borrow any new funds. To put the impact of that into context, over the past four years the government of Barbados has borrowed almost two billion dollars,” said Minister in the Ministry of Economic Affairs, Marsha Caddle, adding “that’s two billion dollars of new Barbadian savings that were drawn into and trapped by government debt”.
Caddle, who spoke at the 2019 planning conference for the Barbados Association of Insurance and Financial Advisors, said the island’s debt had already declined from near 170 per cent of gross domestic product (GDP) in May last year to 124 per cent this year.
The announcement by CariCRIS comes as the Central bank of Barbados (CBB) is preparing to review the performance of the island’s economy last year and the prosepcts for this year. The review will take place on January 30.