New York, December 23, 2011 -- The following release represents Moody's Investors Service's summary
credit opinion on Jamaica and includes certain regulatory disclosures
regarding its ratings. This release does not constitute any change
in Moody's ratings or rating rationale for Jamaica.
Moody's maintains the following ratings on Jamaica, Government
of and its following affiliates:
Long Term Issuer (domestic and foreign currency) ratings of B3
Senior Unsecured (domestic and foreign currency) ratings of B3
Senior Unsecured Shelf (foreign currency) ratings of (P)B3
Air Jamaica Limited
BACKED Senior Unsecured (foreign currency) ratings of B3
RATINGS RATIONALE
Jamaica's B3 foreign- and local-currency government bond
ratings reflect the country's low economic development, moderate
institutional strength, weak government finances, and high
susceptibility to shocks. Jamaica's per capita GDP is higher than
the B-category median but annual growth has averaged less than
1% a year in the last decade. The country has been in recession
for the past three years, only recovering in the first quarter of
2011. Lack of growth makes reducing the debt burden difficult and
the country's debt-to-revenues ratio remains among the highest
in its rating category, even after last year's domestic debt exchange.
A high tolerance for fiscal austerity measures among its population,
and the country's broad consensus on economic policies supports our view
of moderate institutional strength, a key support for the rating.
The country's high susceptibility to event risk is the result of an economy
highly vulnerable to external shocks given the importance of tourism and
continued need for external financing. Jamaica's per capita GDP
is higher than the B-category median but annual growth has averaged
less than 1% a year in the last decade.
Rating Outlook
Jamaica's Stable Outlook reflects Moody's views that changes to the government's
bond ratings are unlikely at this time, given the country's still
high debt burden and low economic growth. The 2010 debt exchange
improved the government's fiscal position by dramatically reducing the
interest burden, but debt levels remain much higher than those of
most of its rating peers, giving the country little room to maneuver.
And while the economy will likely grow in 2011, after 3 years of
recession, we expect future growth to remain subdued. Fostering
conditions promoting faster growth will likely remain a key policy challenge.
What Could Change the Rating - Up
A Positive outlook or other upward ratings movement could result if fiscal
consolidation efforts are successful and/or economic growth rebounds strongly,
leading to a sustainable drop in the main debt metrics. It will
require a combination of continued fiscal restraint and structural reforms
supporting faster economic growth. This depends on policy continuity
to ensure that recent efforts to improve the fiscal and debt position
bear fruit. This is under the control of Jamaica's political system.
But it also requires no major external shock that impacts public finances,
which is not susceptible to government control.
What Could Change the Rating - Down
A Negative outlook or other downward ratings movement would result from
failure to limit debt growth and/or slower economic growth that leads
to another fiscal crisis. In many ways this is the exact flip side
of the positive scenarios outlined above since either an external shock
(including natural disasters) or a policy shift to higher deficits could
lead to downgrades.
The principal methodology used in this rating was Sovereign Bond Ratings
published in September 2008. Please see the Credit Policy page
on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
Although these credit ratings have been issued in a non-EU country
which has not been recognized as endorsable at this date, the credit
ratings are deemed "EU qualified by extension" and may still
be used by financial institutions for regulatory purposes until 31 January
2012. ESMA may extend the use of credit ratings for regulatory
purposes in the European Community for three additional months,
until 30 April 2012, if ESMA decides that exceptional circumstances
arise that may imply potential market disruption or financial instability.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Information sources used to prepare the rating are the following :
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's
Investors Service information.
Moody's considers the quality of information available on the rated
entity, obligation or credit satisfactory for the purposes of issuing
a rating.
Moody's adopts all necessary measures so that the information it
uses in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not
an auditor and cannot in every instance independently verify or validate
information received in the rating process.
Please see the ratings disclosure page on www.moodys.com
for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%)
and for (B) further information regarding certain affiliations that may
exist between directors of MCO and rated entities as well as (C) the names
of entities that hold ratings from MIS that have also publicly reported
to the SEC an ownership interest in MCO of more than 5%.
A member of the board of directors of this rated entity may also be a
member of the board of directors of a shareholder of Moody's Corporation;
however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating
Process page on www.moodys.com for further information on
the meaning of each rating category and the definition of default and
recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is
the most reliable and accurate based on the information that is available
to it. Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has
issued the rating.
Gabriel Torres
VP - Senior Credit Officer
Sovereign Risk Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Bart Oosterveld
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Disclosures on Credit Ratings of Jamaica, Government of
