S&P raises Jamaica credit rating after completion of debt exchange

Standard & Poor’s (S&P) has raised Jamaica’s foreign and local currency sovereign credit ratings to “CCC+” and out of default. The move comes after the completion of Jamaica’s debt restructuring.

The new rating will reflect S&P’s “assessment of the Jamaica government’s continued vulnerability to adverse external shocks, its low level of international reserves, and the risks to a successful implementation of its reform program in conjunction with assistance from the International Monetary Fund (IMF).

S&P said the failure of a 2010 domestic debt exchange (JDX) to achieve sustainable debt reduction “highlights the difficulties facing Jamaica.”

“The ratings on Jamaica reflect the government’s still high debt burden, offset somewhat by its improved amortization and cost profile in the short term,” said S&P’s credit analyst Joydeep Mukherji in a statement.

Jamaica launched a US$9.1 billion domestic debt exchange last month to try to alleviate the financing pressures of its sizeable debt load.

It is projected that Jamaica’s 2013 debt metrics, at 119 percent of gross domestic product and 470 percent of revenues, are among the highest of all rated sovereigns.