Moody’s Consultation Successfully Concluded

Mr. Adrian Javier Garza, Assistant Vice-President/Analyst, Moody’s Investor Services presents the Preliminary Report to Mr. Joel Jack, Secretary for the Division of Finance and Enterprise Development, Tobago House of Assembly.
Tobago is one step closer to retaining its international global credit rating. A team from the Finance and Enterprise Development Division led by Secretary, Joel Jack met with with Moody’s Investor Services representatives Ms. Roxana Munoz and Mr. Adrian Javier Garza at the Victor E. Bruce Financial Complex, Tobago recently (6 February, 2015) to complete the final phase of the ratings exercise. The discussions which started last year will conclude in the next few weeks with the assignment of a credit rating for the island.

According to Secretary Jack, “This rating will go a long way, boosting investor confidence and advancing the THA’s development plans for the island as set out in the Comprehensive Economic Development Plan (CEDP). It will provide the Assembly with greater access to the capital market where it can independently source funds for priority projects to sustain growth on the island. This has become even more critical given the situation with the energy sector. Decreasing oil prices and the continuous challenges with central government allocations will soon be appropriately addressed through the utilisation of alternate models for funding for Assembly projects including Public Private Partnerships other similar mechanisms.”

In order to secure this rating, which the assessment team has indicated will be positive, the THA has been subject to intense scrutiny of its financial operations including examination of its institutional framework, its sources of income, the performance of revenues of Assembly, expenditure trends including the evolution of its recurrent expenditure, its contingencies account expenses, the THA deposits, its cash management and liquidity and its debt financing and management.

Trinidad and Tobago now enjoys a Baa1 rating and the outlook for the Assembly’s rating may be on par. Interim reports indicate the island is on the high end of spectrum when compared to other rated Latin American regional governments whose scores span Baa1 and Caa3. The island’s balanced fiscal results (operating surplus), very low debt levels and solid liquidity position were noted in the report and should impact positively on the overall grade assigned. If given a Baa1 rating the island will be one of the highest ranked in the Caribbean scoring higher than Barbados, Jamaica and St Vincent among others.

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