Moody’s Investors Services (“Moody’s”) has downgraded the Government of The Bahamas’ long-
term issuer and senior unsecured ratings to B1 from Ba3 and changed the outlook from negative
to stable. Moody’s acknowledges that the ongoing economic recovery, driven by a rebound in
tourism, and the improved fiscal performance as demonstrated in the past fiscal year, will lead to
reduced borrowing needs and greater fiscal consolidation going forward. Their concern at the
moment is that elevated external borrowing costs, if experienced over an extended period of time,
could lead to more limited financing options thus increasing government liquidity risk.
The Government has laid out a clearly articulated strategy in its annual borrowing plan to mitigate
against the impact of the elevated external costs being seen now. The plan has identified the local
market and multi-laterals as major sources of financing during this period. Multi-lateral support
via guarantees and other credit enhancement will be used to attract other private financing and the
Ministry has already seen significant appetite for such structures. This, in combination with lower
gross financing needs, has eliminated the need to go to the bond market in the near to medium
term.
Moody’s acknowledges that the Government is well positioned to meet its obligations in the near
to medium term but points to what they consider to be a more challenging period beginning in
2027. A look at our repayment profile in the Medium Term Debt Strategy would show that this
period is quite favorable as it was structured to pay our obligations down in a consistent manner,
avoiding large swings in debt service from year to year. In addition, as budgeted, assets continue
to accumulate in the sinking funds established to service that debt and the budgeted amounts are
now being supplemented by tax arrears collected.
We believe that as we execute the strategy outlined in our fiscal strategy report and our borrowing
plan, there will be improvements in debt affordability and fiscal consolidation which will put
upward pressure on our ratings.
The Ministry invites and encourages the public to visit the national Budget Website
(www.bahamasbudget.gov.bs) to view the various statistical reports available to the public.
Moody’s Investors Services (“Moody’s”) has downgraded the Government of The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3 and changed the outlook from negativeto stable. Moody’s acknowledges that the ongoing economic recovery, driven by a rebound intourism, and the improved fiscal performance as demonstrated in the past fiscal year, will lead toreduced borrowing needs and greater fiscal consolidation going forward. Their concern at themoment is that elevated external borrowing costs, if experienced over an extended period of time,could lead to more limited financing options thus increasing government liquidity risk.
The Government has laid out a clearly articulated strategy in its annual borrowing plan to mitigateagainst the impact of the elevated external costs being seen now. The plan has identified the localmarket and multi-laterals as major sources of financing during this period. Multi-lateral supportvia guarantees and other credit enhancement will be used to attract other private financing and theMinistry has already seen significant appetite for such structures. This, in combination with lowergross financing needs, has eliminated the need to go to the bond market in the near to mediumterm.
Moody’s acknowledges that the Government is well positioned to meet its obligations in the nearto medium term but points to what they consider to be a more challenging period beginning in2027. A look at our repayment profile in the Medium Term Debt Strategy would show that thisperiod is quite favorable as it was structured to pay our obligations down in a consistent manner,avoiding large swings in debt service from year to year. In addition, as budgeted, assets continueto accumulate in the sinking funds established to service that debt and the budgeted amounts arenow being supplemented by tax arrears collected.
We believe that as we execute the strategy outlined in our fiscal strategy report and our borrowingplan, there will be improvements in debt affordability and fiscal consolidation which will putupward pressure on our ratings.
The Ministry invites and encourages the public to visit the national Budget Website(www.bahamasbudget.gov.bs) to view the various statistical reports available to the public.
