NEW YORK – A major international credit rating agency is warning of more Caribbean sovereign debt restructurings ahead of the Caribbean Development Bank annual meetings in St. Lucia this week.
The Wall Street-based Moody’s Investor Service said on Monday that it expects sovereign credit quality to “continue deteriorating in the region.
“We see the defaults of Belize (Caa2 stable), Jamaica (Caa3 stable) and Grenada (unrated) over the past year as being part of a broader debt crisis in the Caribbean,” it said in a report.
“Moreover, we expect the risk of sovereign default in the region to persist as countries continue facing a combination of solvency and liquidity pressures and are increasingly unable, and unwilling, to service debt.”
Moody’s said the Caribbean’s debt overhang is a “legacy of debt accumulation that started in the 1990s, as governments accelerated borrowing, often from external commercial sources, to finance public-sector investment. (CMC)