Moody’s rating for Tobago under review

In two months’ time, Tobago will know whether its bond credit rating will be downgraded by Moody’s Investor Service.

At yesterday’s (March 9) weekly post-Executive Council media briefing at the Administrative Complex, Calder Hall, Secretary of Finance and Enterprise Development Joel Jack said the international ratings agency is currently reviewing the Tobago House of Assembly’s Baa2 rating. “Moody’s recently issued their annual rating for the Tobago House of Assembly and Moody’s placed the Tobago House of Assembly under review of our Baa2 rating for a two-month period,” Jack said. “This action follows Moody’s rating on March 4, in which the agency placed the Trinidad and Tobago government bond rating under review as well for downgrade.”

Jack said Moody’s listed the key drivers of the rating action as the strong financial linkages between the THA and Trinidad and Tobago, and expectation of declining revenues.

“During that two-month review period,” the Secretary explained, “Moody’s will look at the likely impact of revenue for the Tobago House of Assembly and within that two-month period, we’ll expect a decision from Moody’s both on Trinidad and Tobago and the Tobago House of Assembly.”

“While Moody’s has placed us under review, nothing in the review cites poor financial performance; it has to do primarily with our linkages with Trinidad and Tobago, primarily because our revenues are tied to that of the national [revenue],” Jack said.

“It is never Moody’s intent to rate the sub sovereign higher than the sovereign. The sub sovereign being Tobago and the sovereign being Trinidad,” the Secretary added.

In April 2015, Moody’s downgraded Trinidad and Tobago’s rating from Baa1 to Baa2 and changed the outlook from stable to negative. Reasons cited for the change included the decline in oil prices and limited economic diversification, which weighed negatively on economic growth prospects, as well as inadequate provision of vital macroeconomic data.

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