Statement by the Hon. Audley Shaw, Minister of Finance and the Public Service on the Standard and Poors Ratings Action


1. On August 5, 2009, Standard and Poors (S&P) downgraded Jamaica’s long term sovereign credit rating to CCC+.
The Government of Jamaica (GOJ) believes that this ratings action ignores several positive economic developments that have taken place in recent weeks.
In recent months, there have been continued signs of an improved outlook for Jamaica’s credit profile:
a. Significant over-subscription of locally issued debt
b. Sharp reductions in market determined local interest rates
c. Sustained stability in the foreign exchange market
d. Tightening of the spreads of GOJ issued foreign currency denominated debt traded in the international capital markets;
2. These developments have also been supported by the GOJ’s application to the International Monetary Fund (IMF) for a standby arrangement. We are confident that an IMF program will enhance the already positive trajectory in Jamaica’s credit profile cited above. In addition, we believe that an IMF program will facilitate access to other multilateral funding sources that will further reduce the GOJ’s borrowing costs. The GOJ believes that S&P’s ratings action are out of context given these developments;
3. The GOJ wishes to emphasize that it is not pursuing nor does it intend to pursue any transaction with its domestic or external partners that could be viewed in any way as a “distressed transaction” according to S&P’s own criteria;
4. Finally, The GOJ remains firmly committed to honoring all of its local and international obligations. In addition, the GOJ wishes to reiterate that the Jamaican financial sector continues to be strong, sound and well regulated by the Bank of Jamaica (BOJ) and the Financial Services Commission (FSC);

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