Belize’s credit rating at risk!

Belize City, June 22, 2011

Six days after international credit rating agency, Standard & Poor’s, announced that Belize was placed 9th in its ranking of ten countries likely to default on its debt, the agency has issued a stern warning that the country’s credit ratings faces downgrading as a result of Government’s forced acquisition of the electricity company, Belize Electricity Limited.

In a release issued on Tuesday, S&P said that it may cut Belize’s credit rating as a result of BEL’s takeover, citing that the nation’s debt is already at a perilous state.

“The final details of the acquisition and its impact on the government’s debt burden and fiscal flexibility are uncertain. However, based on the information currently available, we believe that there is significant likelihood that we could lower the ratings to ‘B-minus’ upon the conclusion of this transaction,” S&P said.

Belize’s credit rating stands at B with S&P.  This is five notches below investment grade.  Anything lower, could send negative signals to foreign investors about the already deteriorated economic climate in the country.

Meanwhile, Moody’s, which is another international credit rating agency, has Belize’s credit rating at B3, and could possibly also issue a warning of a possible downgrade.

Prime Minister Dean Barrow, who is attending a regional meeting in Guatemalan, has admitted that the BTL takeover could negatively impact foreign investor confidence in Belize.

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