Barbados Long-Term Sovereign Credit Ratings Lowered To 'B-' From 'B' On High Fiscal Deficits; Outlook Is Negative

OVERVIEW Barbados' fiscal adjustment again fell short of stemming another increase in debt to GDP, which is already very high and a key credit constraint. Central bank financing of the government's deficit continues, exacerbating Barbados' financial and external weaknesses. As a result, we are lowering our long-term foreign and local currency sovereign credit ratings on Barbados to 'B-' from 'B'. The outlook on the long-term rating is negative, reflecting a greater than one-in-three chance of a downgrade, should the government be unable to lower its fiscal deficits, or if growth fails to strengthen, putting additional pressure on the country's weakening external position. RATING ACTION On Sept. 23, 2016, S&P Global Ratings lowered its long-term foreign and local currency sovereign ratings

...OVERVIEW + Barbados' fiscal adjustment again fell short of stemming another increase in debt to GDP, which is already very high and a key credit constraint. + Central bank financing of the government's deficit continues, exacerbating Barbados' financial and external weaknesses. + As a result, we are lowering our long-term foreign and local currency sovereign credit ratings on Barbados to 'B-' from 'B'. + The outlook on the long-term rating is negative, reflecting a greater than one-in-three chance of a downgrade, should the government be unable to lower its fiscal deficits, or if growth fails to strengthen, putting additional pressure on the country's weakening external position. RATING ACTION On Sept. 23, 2016, S&P Global Ratings lowered its long-term foreign and local currency sovereign ratings on Barbados to 'B-' from 'B'. The outlook is negative. The short-term ratings were affirmed at 'B.' We also downgraded our transfer and convertibility assessment for Barbados to 'B-' from 'B'....

Ratings Action