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CIG keeps Moody’s Aa3 rating on its bonds

| 04/03/2016 | 4 Comments

Cayman News Service(CNS Business): The finance minister credits government’s fiscal prudence for retaining the Cayman Islands’ solid credit rating and stable economic outlook after the international credit rating agency, Moody’s, maintained Cayman’s Aa3 rating for the government’s bonds issued in a foreign currency and an Aa2 rating for long-term foreign currency ceiling bonds and notes. Marco Archer said it was the government’s economic policy that had helped maintain investor confidence in the jurisdiction.

“Moody’s concludes that there is a very low risk of government imposing limits on its foreign currency debt repayments,” said Archer following the news. “Government’s repayment obligations will continue to be met which, undoubtedly, maintains investors’ confidence in these islands. The sustained excellent ratings by Moody’s signify that public finances in the Cayman Islands have been managed prudently.”

He added, “The government fosters a stable political environment and endeavours to implement prudent fiscal policies and strategies. Our fiscal stance has resulted in high credit ratings which allow these Islands to benefit from low-cost investment financing.”

Moody’s most recent credit opinion, dated 16 December 2015, reflects a number of considerations which were satisfied by the Cayman Islands, including a high per capita Gross Domestic Product (GDP) estimated at US$55,751 for 2015, the thirteenth highest in Moody’s rating universe, and a comparatively low debt burden with a Debt-to-GDP ratio which continues to trend down, relative to other rated jurisdictions.

The agency also found that the fiscal and debt position was comparatively robust, with fiscal surpluses, low levels of debt, high debt affordability, and easy access to finance.

Moody’s also found that politically, there is very little risk of a destabilizing event, given strong institutions and the United Kingdom’s fiscal oversight, that there was a very low susceptibility to event risk.

Moody’s credit opinion Cayman Islands Government-16-dec-2015

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Category: Economy, Finance

Comments (4)

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  1. Anonymous says:

    just above junk

    • Anonymous says:

      Aa3 is investment grade. BB/Bb/B2 and lower is junk. Sadly, we would probably be in the later if not for being a UK Dependency. Credit agencies don’t like to hear about $10mln nation building slush funds, huge incomplete capital projects, or the uncomfortable state of record keeping within CIG that continues.

  2. Anonymous says:

    Aa3 reflects the fact that Cayman’s loan book is back-stopped by the full faith and credit of the United Kingdom; specifically via FCO oversight on debt coverage – currently red-lining at max leverage. Q. What has the UK done for us lately? A. Among other things, the U.K. relationship has allowed the Cayman Islands to borrow on the scale that it has, plain and simple.

  3. Anonymous says:

    Says a lot about what is really going on..

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