Barbados’ rating from Standard & Poor’s might now be in junk territory, but that is not stopping international financiers from lining up to loan the island millions of dollars.
That’s what Central Bank of Barbados Governor Dr. DeLisle Worrell reported today, following recent meetings with lenders in Tokyo, Japan.
Fielding questions from the media one day after his institution issued its third quarter review of the economy, the economist said he and other officials had learnt that S&P’s decision to lower Barbados’ credit rating below investment grade in July was not as negative as some people thought.
“The reality is that it doesn’t matter, that is what we discovered in Tokyo, that the investors are not worried,” he said.
“There are certain kinds of investors who, because of the rules that they have, are not allowed to invest in anything less than investment grade, but there are so many people out there who are looking for investments in which they can have some confidence and we have such a credible name in the international markets, largely through our own efforts, that we would have no difficulty in borrowing, in fact our problem is that we borrow too little.”
Worrell also said that the Barbados delegation led by Minister of Finance and Economic Affairs, Chris Sinckler, also discovered the reasons behind S&P’s decision to downgrade Barbados, and were satisfied that it had nothing to do with Government’s current policies.
“We had very full discussions with both the rating agencies, … as well as investors while we were at the annual meetings in Tokyo and they explained their position and they said that ‘the downgrade was not as a result of any concern about your policy framework’,” he noted.
The governor said S&P officials also told them “you have a strong policy framework, you have a good reputation in the international markets and so on, it is just that your numbers, particularly your debt to GDP numbers and … your fiscal numbers, when we compared them with other countries in investment grade were on the iffy side, and since we have been downgrading everybody else we couldn’t hold out against downgrading Barbados, it is as simple as that”. (SC)