Providenciales, 01 Jul 2015 – Global ratings agency Standard & Poor’s (S&P) has maintained its BBB+ rating with a stable outlook for the Turks and Caicos Islands (TCI) it announced Tuesday, 30th June 2015.
This strong grading follows TCI’s first sovereign rating in 2014 which provided global recognition of its financial reforms and fiscal success.
A team from S&P visited the islands in May and met with a range of politicians, officials and business leaders as part of the annual review process.
“This is further expert recognition of our tremendous progress in making the TCI one of the fastest recovering economies in the Caribbean,” said Minister of Finance, Washington Misick.
“S&P has recognized our ongoing success in consolidating public financial management reform and improving our fiscal resilience. BBB+ means that we are more highly rated than many countries in the Caribbean.”
S&P again made clear that TCI’s close relationship with the UK, as an Overseas Territory, was a key factor in its rating calculation.
One of the benefits of maintaining a BBB+ rating is in strengthening the TCI’s negotiating position as it holds discussions with financial institutions ahead of refinancing its UK-guaranteed $170m bond, when it matures in February 2016.
The TCI plans to issue invitations to tender for its refinancing requirement in September 2015. It is TCI’s intention to use $110m already held in a sinking fund, plus an additional contribution from the first half of financial year 2015-16 to repay most of the bond, with the balance being covered by new bank debt.
The BBB+ rating is a strong factor in attracting foreign direct investment to TCI and building confidence amongst its existing business community. The TCI economy grew by an estimated 4.6% in 2014 and is forecast to grow an average of 2-3% per annum over the next three years.
The TCI government generated a US$77.3m operating surplus and a 16% increase in recurrent revenue to $246.5m for the financial year ending March 2015.
The surplus further consolidates the Islands’ position as one of the strongest economies in the Caribbean region. In March 2015 the TCI government’s net debt to GDP ratio was approximately 24%, while its revenue to GDP is 30%.