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#422893 - 11/22/11 09:16 AM S&P Revises Belize Outlook To Negative
Marty Online   happy
Standard & Poor's Ratings Services revised its outlook on Belize to negative from stable, citing diminishing political incentives to service Belize's external debt.
The credit rater, which affirmed its B-minus/C sovereign long-term foreign currency credit ratings, noted rising crime, public-sector wage pressures and budget constraints may reduce political incentives to pay debt service.
S&P also pointed to Belize's external imbalances, weak political institutions and large general government debt burden, which constrain the rating at the B-minus level.

At the same time, it said external financing and a favorable external amortization profile for the medium term support the ratings.
S&P last downgraded Belize's ratings in early August after the heavily indebted country acquired a large stake in its distressed utility company.
A growing number of Belize's public-sector companies have exposed contingent liabilities in recent months, putting more pressure on the country's balance sheet. The Belizean government in June added a stake in Belize Electricity Ltd.

-By Lauren Pollock, Dow Jones Newswires; 212-416-2356; lauren.pollock@dowjones.com

#423012 - 11/23/11 08:21 AM Re: S&P Revises Belize Outlook To Negative [Re: Marty]
Marty Online   happy

Standard & Poors rating for Belize from B to B-

There’s bleak news to report on the financial front. Belize’s foreign currency credit score was downgraded by Standard and Poor’s in early August following government’s acquisition of the Belize Electricity Limited. The country’s credit rating went down from a B to a B minus because, according to S&P, the nationalization added to the country’s fiscal problems. The only silver lining then was that S&P’s outlook for the future of Belize’s finances was stable. Well, that changed today when S&P, revised its outlook from stable to negative and confirmed that Belize’s rating is a B minus bordering on a C. The international credit rating agency cites diminishing political incentives to service the country’s external debt as the reason for the negative outlook. It notes that “rising crime, public-sector wage pressures and budget constraints may reduce political incentives to pay debt service.” Other factors listed by S&P included Belize’s external imbalances, weak political institutions and the large government debt burden. The report ends saying that “A growing number of Belize’s public-sector companies have exposed contingent liabilities in recent months, putting more pressure on the country’s balance sheet.” In June, Moody Investors also lowered Belize’s credit rating to a B. The ratings heavily influence foreign investment and could mean higher interest rates when Belize needs to borrow on the capital markets.

Channel 5

Edited by Marty (11/23/11 08:22 AM)

#423125 - 11/24/11 08:11 AM Re: S&P Revises Belize Outlook To Negative [Re: Marty]
Marty Online   happy

PM says S&P does not affect country’s performance

In the wake of government’s acquisition of public utilities, U.S. based financial services company Standard & Poor’s downgraded Belize’s credit rating from a B to B minus in early August. But the outlook for Belize’s financial future was stable until this week, when S&P downgraded it to a negative and confirmed that the country’s rating borders a C. The reasons given for the downgrade are growing crime, public sector wage pressures and budgetary setbacks. Today however, P.M. Barrow dissed the ratings, saying they do not affect Belize’s economic performance and that the company also wrongly forecasted the United States’ credit ratings.

Dean Barrow

“The actual rating remains the same but believe me it’s no bravado when I tell you that’s a matter of supreme indifference where I am concerned. Standard & Poor’s rates sovereign debt and that is only important for people who are in the markets, who are borrowing by way of bonds and that sort of thing. The extent that it effects Belize’s bonds that are already out there, these are the bonds that are part of the Super Bond, it doesn’t affect us as a country in any way at all. In terms of the trading in Belize bonds that are already out there it’s no doubt that it’s consequential but it doesn’t, we only borrow from the concessionary institutions now, from the multilateral institutions and so a Standard & Poor ratings has nothing to do with our ability to assume that kind of concessional development that so. And because I am indifferent I suppose there’s no need for me to go and say anything about Standard & Poor’s in terms of their effectiveness but I will, why not, they downgraded the U.S from Triple A, what happened, there was a rush into U.S. treasuries. There was a rush to assume on the part of other countries and individuals that in fact engage in this sort of thing to assume to buy more treasures. The U.S. ten year note, the yield is at its lowest despite the Standard & Poor’s downgrade. Your yield is dependent on the demand for your paper. The more demand there is the less you can pay. The ten year yield is down to two percent, in other words, Standard & Poor’s obviously got it completely wrong.”

Channel 5


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