S&P downgrades Barbados

Standard & Poor's said it lowered Barbados' foreign-currency sovereign credit rating to BBB-/A-3 from BBB/A-3, its local-currency rating to BBB-/A-3 from BBB+/A-2 and the transfer and convertibility assessment on Barbados to BBB.

The outlook is stable.

The agency said the downgrade reflects the continuing weakening of the government's fiscal profile. Although the refinancing risk remains low, the high and increasing level of debt is straining fiscal accounts and, if not addressed, could lead to a loss of investor confidence, S&P said.

The downgrade of the local-currency rating also reflects the country's rising fiscal imbalances, S&P said.

The stable outlook hinges on the agency's expectation that the authorities will, in the next six months, put in place fiscal measures to reverse the rising debt trajectory going forward.

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