– CariAA- (Regional Scale Foreign and Local Currency)
TRINIDAD / USVI – Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed its issuer ratings of CariAA- (Foreign and Local Currency) on our regional rating scale for the Government of the Virgin Islands (GoVI).
These ratings include a 4-notch uplift for the likelihood of support from the United Kingdom (UK). The notched-up regional scale ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean is high.
CariCRIS has also assigned a stable outlook on the ratings. The stable outlook is based on expected continued good control over fiscal operations guided by the Protocols for Effective Financial Management (PEFM)1 and the consolidation of economic growth based on recovery in tourism and resilience in financial services.
The factors that support the ratings of the ‘high creditworthiness’ are (1) the continued support from the UK as an Overseas Territory, (2) the VI’s income and economic fundamentals which create high GDP per capita, (3) dollarization has supported strong economic fundamentals and trade stability, and (4) the VI’s prudent fiscal policy guided by the PEFM has resulted in low debt levels.
The sovereign’s rating strengths are tempered by: (1) its limited human resource capacity arising from its relatively small population base, (2) inadequate monitoring of the external sector may further impede the country’s ability to make informed policy decisions, and (3) the prevailing political uncertainty surrounding the implementation of the Commission of Inquiry’s recommendations.