Government’s decision to suspend payments on its debts has once again come back to bite Barbados.
That’s because for the second time since the May 24 General Election, Standard & Poor’s (S&P) has hit the island with a credit downgrade.
And this latest downgrade of Barbados’ local currency rating from CC to Selective Default (SD) and the 2019 and 2022 Global Bonds from CC to Default (D) has left several people concerned.
Economist Jeremey Stephen told the NATION on Wednesday that these downgrades were expected, given Government’s Mini-Budget restructuring plans which included the issuing of a moratorium on external debt payments and the asking of domestic creditors to roll over principal maturities until the Government reached an agreement with its creditors.
However, Stephen said these downgrades were of major concern as they posed the risk of not being able to fulfil the US$200 million bonds which were issued in July 2010.