CaribWorldNews, NEW YORK, NY, Thurs. Nov. 19, 2009: Jamaica`s bond rating was yesterday cut by ratings agency Moody`s Investors Service.
The action pushed the Caribbean nation`s ratings into the highly speculative territory rank even as it continues to cope with a high debt load in a tough global economic market.
Moody`s lowered Jamaica`s local and foreign currency bond ratings down two notches to Caa1. The outlook is negative, meaning further downgrade isn`t out of the question. Jamaica`s debt-servicing costs currently account for over 55 percent of central government revenue and 16 percent of gross domestic product.
The agency on Wednesday said it is also concerned about delays in Jamaica reaching a pact with the International Monetary Fund but noted that even an IMF pact would likely be just a temporary fix.
`Even though an IMF program would probably give some much-needed breathing room to the fiscal position, the size of the public debt is such that Jamaica is unlikely to restore debt sustainability in the medium-term without some sort of meaningful debt restructuring at some point,` said credit analyst Alessandra Alecci.
The Moody`s cut comes on the heels of similar action by Standard & Poor`s Ratings Services.