Moody’s the international credit rating agency, has delivered an untimely blow to the government’s plans for raising $200 million through the international bond markets by revising it’s outlook on this nation downwards from positive to stable, meaning that the Bahamas will have to pay more to obtain debt financing.
The change in outlook, although not as bad as a downgrade, is likely to mean that international investors will seek compensation for the extra risk attached in buying into the $200 million issue through higher interest rates attached to the bonds. One source told The Tribune that the Moody’s outlook change was likely to add between 0.25 and 3/8 of a percentage point to the interest rate attached to the debt issue.
The outlook revision, which Moody’s said had been prompted by the sluggish tourism industry that accounts for 70 per cent of this nation’s gross domestic product (GDP) comes just days after MP’s passed a House of Assembly resolution authorising the government to proceed with the $200 million issue, which is intended to reschedule debt and obtain foreign currency for financing capital works projects in the 2003 – 2004 fiscal year.
Source: The Tribune
