The IMF, which has been negotiating the terms of a $1.2 billion stand-by facility with Jamaica for several months, said on Friday after fund officials spent several days in Kingston, that discussions would continue in Washington next week. The focus, said the IMF, is “on how to reduce the large fiscal deficit and put the debt on a clear downward path.” There was no clarification with respect to the timing for finalizing the discussions.

A delay in reaching an agreement with the IMF could have potentially adverse credit consequences given Jamaica’s continued fiscal underperformance. An agreement with the IMF is crucial to provide essential multilateral funding to strengthen Jamaica’s external position, shore up confidence and meet financing obligations.

A sizeable fiscal adjustment required to stabilize debt dynamics is presenting a major challenge to the government as the majority of expenditures are devoted to wages – which have already been frozen – and interest payments while revenues are declining amid depressed economic activity. This year’s fiscal deficit is projected at 8.7% of GDP and public debt is expected to reach some 120% of GDP.

The government has repeatedly expressed its commitment to service its obligations in both local and foreign currency and has a long track record of timely debt service even during difficult times. However, Jamaica’s limited resources relative to the size of the public debt raise the possibility of a debt restructuring in order to place the government financial position on a sustainable path.

Jamaica’s B2 rating, among the lowest assigned by Moody’s to a sovereign nation, already reflects significant concerns about the government’s ability to honor obligations given its limited policy options to deal with the effects of the on-going economic downturn. High levels of public debt and vulnerability to interest and exchange rate movements limit the country’s flexibility in meeting these challenges.

S&P: National Commercial Bank Jamaica Counterparty Credit Rating Lowered To ‘CCC’; Survivability Assessment Lowered To ‘B’

* On Nov. 2, 2009, we lowered the long-term sovereign rating on Jamaica to ‘CCC’ from ‘CCC+’.
* We are lowering our ratings on NCB, including the long-term counterparty credit rating, to ‘CCC’ from ‘CCC+’. We are also lowering our survivability assessment on NCB to ‘B’ from ‘B+’.
* The outlook on NCB remains negative, mirroring that on Jamaica, as a result of the bank’s concentration in government debt securities and loans to public entities in the country.

MEXICO CITY Nov. 4, 2009–Standard & Poor’s Ratings Services said today that it lowered its ratings on National Commercial Bank Jamaica Ltd. (NCB), including the long-term counterparty credit rating, to ‘CCC’ from ‘CCC+’. At the same time, we lowered our survivability assessment on NCB to ‘B’ from ‘B+’, as assigned on Aug. 6, 2009. The outlook is negative.

[In rating agency speak, the survivability assessment is "a current opinion on the likelihood that over the medium-term, a bank will either directly or through a successor organization, remain in operation, regardless of whether it is solvent or insolvent, paying all of its obligations on a timely basis or not."

Moreover: "A relatively low survivability assessment does not constitute an opinion by Standard & Poor's that a particular bank is likely to fail; rather it indicates a vulnerability to adverse circumstances which could affect the bank's ability to meet its financial obligations on a timely basis, without special circumstances which would clearly enhance the likelihood that it would continue to operate in such an event. "

And here's what S&P means by a "B" rating in this area: "A bank with a survivability assessment of 'B' is VULNERABLE. Adverse business, financial or economic conditions will likely impair the bank's ability to maintain operations in which case the bank may become subject to regulatory intervention."]

The rating action followed the downgrade of the long-term sovereign credit rating on Jamaica (CCC/Negative/C) to ‘CCC’ from ‘CCC+’.

“NCB has a very large exposure to Jamaican sovereign-debt securities and loans to public entities,” said Standard & Poor’s credit analyst Alfredo Calvo. “Also, Jamaica’s deteriorating economic situation and the more-challenging conditions for the Jamaican banking system will continue to pressure the financial performance of the bank.”

The action on the survivability assessment was based on the downgrade of NCB and our view that vulnerabilities in the government’s debt profile have grown significantly from previous years, narrowing the government’s capacity to support the bank in times of stress.

However, we are still maintaining our survivability assessment at three notches higher than the counterparty credit rating on NCB. This reflects our continuing expectation that the government could give certain assistance to the bank if needed because of NCB’s significant market share in the country, adequate financial performance, and large branch network and deposit base.

If the liquidity and market share of the bank shrink significantly, we could further adjust our survivability assessment.

The ratings on NCB are limited by the bank’s large exposure to Jamaica’s government; greater loan concentration than peers; operation within a relatively small and nondiversified economy with high debt; and the more challenging environment for the Jamaican banking system.

However, the bank’s leading market presence in the Jamaican banking system, adequate but pressured performance under more-challenging conditions, and consistent improvements in its operating performance support the rating.

From rating agency Standard & Poor’s on Monday, highlighting mine:

Jamaica Long-Term Ratings Lowered One Notch To ‘CCC’, Outlook Negative

– Jamaica’s Central bank governor, who was the lead negotiator on a possible standby facility from the IMF, has resigned.

– We are lowering the long-term foreign and domestic currency ratings on Jamaica to ‘CCC’ from ‘CCC+’.

– The negative outlook on the ratings signals the growing risk of a debt exchange operation that could be an event of selective default under our distress debt exchange criteria.

NEW YORK, Nov. 2, 2009–Standard & Poor’s Ratings Services lowered its long-term foreign and domestic currency ratings on Jamaica to ‘CCC’ from ‘CCC+’. The outlook on the ratings is negative.

We kept the recovery rating on the senior unsecured debt at ‘4′ and the country transfer and convertibility (T&C) assessment at ‘B’.

The downgrade on Jamaica follows the resignation of Central Bank governor Derick Latibeaudiere, who was the lead negotiator within the framework of a possible standby facility from the International Monetary Fund (IMF).

On Aug. 5, 2009, we downgraded Jamaica’s domestic and foreign currency long-term ratings to ‘CCC+’ with a negative outlook. At that time, we highlighted the fact that Jamaica’s severe fiscal situation as well as the vulnerabilities in the government’s debt profile may give it incentives to renegotiate with its creditors, particularly its resident creditors that hold the larger bulk of Jamaican debt.

“Since then, the government’s room to maneuver continues to narrow as it becomes increasingly difficult to further cut public expenditures–as reflected, in part, in the recently amended budget–in order to sustain an interest burden of about 60% of general government revenue,” said Standard & Poor’s credit analyst Roberto Sifon Arevalo.

The negative outlook on the ratings signals the growing risk of a debt exchange operation that could be an event of selective default under our distress debt exchange criteria. While the government’s engagement with the IMF is a positive effort to address the long-standing structural issues in Jamaica, recent events highlight the complexity of the negotiation process and create more uncertainty about the timeframe for reaching an agreement with the Fund.

S&P: Republic Bank Ltd. Counterparty Credit Ratings Affirmed At ‘BBB-/A-3′ With Stable Outlook

* The bank’s financial performance has been stable through a period of tough economic conditions in the Caribbean region.
* We are affirming the ‘BBB-/A-3′ counterparty credit ratings on RBL.
* The stable outlook reflects the bank’s likely maintenance of its financial profile in 2009 and 2010.
* A downgrade could result from rising nonperforming assets or falling profits, or an upgrade could result from a curtailing of further nonperformers.

MEXICO CITY Oct. 2, 2009–Standard & Poor’s Ratings Services said today that it affirmed its ‘BBB-/A-3′ counterparty credit ratings on Republic Bank Ltd. (RBL). The outlook is stable.

“Our ratings on RBL are based on RBL’s leading market position in Trinidad and Tobago, stable financial performance, and geographic diversification in the Caribbean,” said Standard & Poor’s credit analyst Alfonso Novelo. “However, we believe that strain on the quality of assets through 2010 will pressure profits, the balance sheet relies on short-term funding, and the bank faces strong competition in the region.“

Unidentified female X, in comment on facebook picture of self looking v tan:

oh gosh…i need to stay out of the sun!

Unidentified female Y, in response:

yuh lookin BLACK

Unidentified female X:

I know. This is terrible…definitely not the shade I want to be!!! I love being fair!!

Indeed.

Trinis drink more alcohol than water—Hospedales

In a word, awful. In two words, bloody awful. Any more words and this post will no longer be fit for children.

But as I am of late attempting to be constructive as well as merely scathing, behold the thinking behind my righteous indignation:

T&T is ranked as the 98th among countries with the highest consumption of alcohol.

This is a non-statement. It tells one nothing. Worse, it doesn’t actually make any sense. What are these countries with the highest consumption of alcohol, pray tell? And how many of them are there? Or did the hapless reporter, Richard Lord, mean to say:

Measured in litres of pure alcohol consumed by its citizens in a given year, Trinidad and Tobago ranks 98th globally, Alicia Hospedales, Minister of State in the Social Development Ministry, said during Wednesday’s debate…

Onward:

She said that information was provided by the World health Organisation (WHO).

Did she, Richard Lord? Did she really mean that someone from the WHO handed her a report on the matter? Perhaps. Rather more likely, Ms Hospedales or one of her staff – unlike say, Richard Lord – did a cursory Google search and happened on this handy Wikipedia-provided, WHO-sourced list of countries ranked by alcohol consumption.

Onward:

Hospedales said the Government’s decision to increase taxes on alcohol and tobacco products was a good one as it is intended to act as a deterrent to users of those products. Responding to claims from Opposition MPs Ramesh Maharaj, Dr Roodal Moonilal and Chandresh Sharma that the initiative was not likely to succeed, Hospedales said she begged to differ. She said the measure would be successful.

SIGH. There is no evidence in this story of either fact checking or even the most cursory editing, so I shall provide some:

Hospedales said the Government’s decision to increases taxes on alcohol and on tobacco based products as part of its 2010 budget proposals was intended to act as a deterrent to users of those products. Higher taxes tend to be passed on to consumers in the form of higher prices,  which may lead to reduced demand for the more expensive goods.

Hospedales disagreed with Opposition MPs Ramesh Maharaj, Dr Roodal Moonilal and Chandresh Sharma, who claimed the initiative was not likely to succeed.

And again:

The minister said T&T had been ranked among the countries with the highest number of Alcoholics Anonymous groups per capita in the world.

She said from statistics it seemed that citizens of this country were drinking more alcohol than water.

Gobsmackingly awful, but *thinking constructive thoughts*:

The minister said T&T also ranked (is this true? And if so, where? would have to ACTUALLY DO SOME REPORTING) among those countries with the highest number of Alcoholics Anonymous groups per capita.

On that point, there’s only one study floating around on the interwebs as regards “AA groups per capita” – it dates back to 1991 and posits, among other things:

the highest ratio of A.A. groups in 1991 was in Iceland (784 groups/million people), which has among the lowest levels of alcohol consumption in Europe, while the lowest A.A. group ratio in 1991 was in Portugal (.6 groups/million people), which has among the highest levels of consumption.

Which is interesting, given what Hospedales apparently said next (according to Richard Lord, anyway):

She added that it was a strong indicator that alcohol use and abuse “was a major problem in T&T.”

The study noted above implies exactly the opposite. Ah well.

As for this:

She said from statistics it seemed that citizens of this country were drinking more alcohol than water

I demand to see those statistics, unless she was making a glib generalisation. In which case, WHY THE HELL DIDN’T THE REPORTER MAKE THAT CLEAR? Oh, right. Because it makes a sexy headline. *dies*

And so it ends:

Hospedales said the use of alcohol had caused a myriad of problems for individuals, families and the society as a whole. She quoted statistics which showed that in T&T “66 per cent of highway deaths was due to alcohol use, 63 per cent of fire deaths, 60 per cent of motor cycle deaths, 50 per cent pedestrian accidents, 50 per cent of drownings have all been due to alcohol consumption.”

And I edit, because someone should have:

Hospedales said alcohol had caused myriad problems for individuals, families and the society as a whole. She cited statistics [FROM? BECAUSE THIS IS QUITE CONTENTIOUS] which suggest that in T&T, 66 per cent of highway deaths were due to alcohol use. According to Hospedales, 63 per cent of fire deaths, 60 per cent of motor cycle deaths, 50 per cent of pedestrian accidents and 50 per cent of drownings have all been due to alcohol consumption.

For shame.

Usain Bolt, by Richard Giles, via flickr/tagaroo

Just one month after rating agency Standard & Poor’s released a downbeat assessment of the outlook for Jamaica comes an equally – if not more – negative take from Barclays Capital Research.

The research note issued today by a New York-based BarCap analyst is unequivocal:

we believe that Jamaica is approaching the point of no return and that it will take more than fiscal adjustments to regain sustainability for the long term. For 2009, we expect interest payments to be 16.0pts of GDP, or more than 60% of revenues. Fiscal sustainability in Jamaica has been under pressure for the past ten years, but we believe that at this time, the IMF is more willing to help Jamaica restructure its debt than to prolong its agony.

Elsewhere in the note, which also examined El Salvador, Panama, Costa Rica, the Dominican Republic and Guatemala, the analyst is even less sanguine about Jamaica’s financial prospects:

Of particular concern, Jamaica’s fiscal deficit could reach around 20% of GDP (with more than 15% of GDP in interest payments). We think it is extremely unlikely that any reform program will be able to put the country on a sustainable medium- to longer-term fiscal path and believe that the IMF is weighing whether it would be costlier to allow (and maybe help) the country to restructure its debt or to give the Jamaican government the USD1.2bn that is soliciting in order to postpone its agony.

Unfortunately, we believe that Jamaica may have already passed the point of no return and that for the IMF, as well as for the country in the long term, it would be more convenient to assist in a restructuring of debt.

As the three tables below – also from the note – illustrate, Jamaica is in dire straits both in absolute terms and as compared with other countries in Central America and the Caribbean:

BarCap

The rating agency issued the following statement on Monday (any emphasis mine, as are the bracketed comments):

Republic of Trinidad and Tobago Ratings Taken Off CreditWatch And Affirmed; Outlook Stable

(CreditWatch negative is ratings agency speak for “we’re concerned about this country, and we may lower our rating on it in the not-too-distant future, unless its economics improves)

–Although Trinidad and Tobago’s bailout of the CL Financial Group could cost up to 6% of expected 2009 GDP, its solid fiscal and external position support its policy flexibility.

–In addition, the government’s debt profile and burden limit external vulnerabilities.

–As a result, we have taken the ratings off CreditWatch negative, affirmed them, and assigned a stable outlook.

NEW YORK, Sept. 14, 2009–Standard & Poor’s Ratings Services said today that it affirmed its ‘A/A-1′ foreign-currency and ‘A+/A-1′ local-currency sovereign credit ratings on the Republic of Trinidad and Tobago. Standard & Poor’s also said that it removed these ratings from CreditWatch, where they were placed on Feb. 3, 2009, with negative implications.

The outlook is stable.

In addition, Standard & Poor’s affirmed its ‘AA’ transfer and convertibility risk assessment on the republic.

“We removed these ratings from CreditWatch after evaluating the possible consequences and the cost associated with the government bailout of one of Trinidad’s largest financial conglomerate: the CL Financial Group,” explained Standard & Poor’s credit analyst Roberto Sifon-Arevalo. “Assuming no recovery from any asset sales, we estimate a potential gross loss for the government of about TT$9 billion, which is 6% of expected 2009 GDP.” At the same time, Trinidad and Tobago’s solid fiscal profile, which has resulted from several years of high-energy prices, gives the government the fiscal and external flexibility needed to manage this potential debt burden as well as the current international financial crisis without materially weakening public finances.

The government is responding to these shocks through countercyclical fiscal measures. In this context, Standard & Poor’s expects the general government will have a deficit of 4.5% of GDP in 2009, down from a surplus of 6.3% of GDP in 2008. In 2010, we expect the deficit to be at about 3.5% of GDP as the government continues with its public infrastructure program aimed to mitigate the impact of the world economic crisis in Trinidad.

Standard & Poor’s does not expect the government to contribute nor tap into the Heritage and Stabilization Fund (HSF) to finance the expected deficit in 2009 or in 2010, keeping the fund’s balance at about 11% of 2009 GDP. We believe that the government will finance the deficit with debt, mostly domestic. As a result, we also expect net general government debt to reach 7% of GDP in 2009 and 12% in 2010, which compares favorably with 28% and 31% for the medians of ‘A’ rated peers in the same respective periods.

“Improvements in transparency, governance, and regulation in the financial industry–and among public-sector enterprises, in particular–could further strengthen Trinidad and Tobago’s creditworthiness over the medium term,” Mr. Sifon-Arevalo added. “Conversely, a higher-than-expected fiscal deterioration because of higher-than-forecasted costs associated with the government bailout of CLFG as well as slippages in the pace of restructuring government-owned entities could lead to an unfavorable rating action.”

Are you listening, Mr Manning?

The Express reports:

Citizens will no longer need a visa for the French overseas territories once their stay is 30 days or less.

Foreign Affairs Minister Paula Gopee-Scoon announced yesterday that following an approach by the Government, the French Government has agreed to exempt nationals of this country travelling to Guadeloupe, Martinique, St Martin and French Guiana from a visa requirement once their stay is for 30 days or less but does not exceed 100 days within a period of 12 months. Gopee-Scoon said the agreement would be in effect in about one week’s time with the exchange of diplomatic notes.

She also disclosed that the Government had also applied to the European Union for a waiver in the visa requirements for short trip stays in the Schengen zone which comprises 25 European countries.

Citizens of Antigua & Barbuda, Barbados and Saint Kitts & Nevis are already exempt from Schengen visa requirements.