Posted on

SVG gets B1 rating by Moody’s Investor Services

Share

The Government of St. Vincent and the Grenadines has been assigned B1 ratings for both long-term foreign and local-currency issuer obligations by Moody’s Investor Services.{{more}}

The announcement was made on Wednesday by Gabriel Torres, Vice President / Senior Analyst of the international credit rating firm.

A B1 rating is a strong B, on a scale that goes from a high of Aaa1 to a low of C3. Obligations rated B are, according to Moody, “considered speculative and are subject to high credit risk.”

Torres said St Vincent and the Grenadines was rated B1 after taking into consideration “supporting factors and credit challenges”.

The fact that this country has a stable political and policy environment and a history of macroeconomic stability worked in its favour, he said, as did being a member of the East Caribbean Currency Union (ECCU), which, according to Moody’s, “dramatically reduces the risk of a loss of confidence”.

SVG’s history of “significant international support in the form of official grants and private remittances,” was regarded positively, Torres said.

“What we do at Moody’s is provide opinions on the likelihood of debt being repaid,” the Analyst explained. He said his organization arrived at their rating after spending a few days in this country meeting with Government officials, the private sector, including banks, and representatives of the ECCB. They also got information from the International Monetary Fund (IMF) other sources.

Torres said this country’s rating was limited by our relatively narrow economic basic, relatively low levels of development as indicated by our GDP per capita rate and high levels of Government debt (60% of GDP), which he said, despite being among the lowest in the ECCU, was in his opinion, still too high. The economy, Torres said, is very vulnerable to natural disasters, which can wreak havoc on our agriculture or tourism.

Moody’s however provided a stable outlook for the country and said “they do not expect changes in the policy outlook in the medium term”.

Jamaica, like SVG has a B1 rating for foreign obligations. Barbados, on the other hand, has a Baa2 rating for foreign obligations and A3 for local currency obligations. SVG is rated ahead of the Dominican Republic, which has a B2 rating. Moody’s said they have not done public ratings for any of the other members of the ECCU.

The rating was done as part of the requirements for the issuing of a US$25 – 37 million facility for the Government of St. Vincent and the Grenadines. This is the first time this country has been rated by a multinational rating company.

LAST NEWS