LatinNews Daily Report - 07 February 2012

Belize | Downgraded. On 6 February a US-based ratings agency, Standard & Poor's (S&P), lowered its long-term foreign- and local-currency sovereign credit ratings on Belize to ‘CCC+’ from ‘B-’. The country’s 'C' short-term credit ratings remain unchanged and the outlook is stable. An S&P credit analyst, Kelli Bissett, said the downgrade “reflects signs of lower political willingness to service Belize's external commercial debt obligations…in addition, Belize faces external imbalances, limited access to external funding, and rising costs of servicing general government debt".  S&P also links the downgrade to the 31 January announcement by Prime Minister Dean Barrow that general elections will take place on 7 March. The ratings agency notes that Barrow – whose United Democratic Party (UDP) will compete with the opposition People's United Party (PUP) for 31 seats in the house of representatives as well as seats on two city and seven town councils, introduced “continued debt service of the government's US$546.8 million bond (known locally as the ‘super bond’) as an election issue. The nature of the statement and prominent public office of the speaker signals, from a credit perspective, lower predictability that the government will continue to service its external commercial debt”.

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