Moody's Downgrades USVI Bonds Further; Says Government May Need To Restructure Debt
Moody’s, one of three top U.S. ratings firms, on January 31 downgraded the U.S. Virgin Islands’ already junk-status bonds, further diminishing the territory’s bond competence in the market, and any hope of the U.S.V.I. being loaned monies to meet its operational needs.
Moody’s assigned an Issuer Rating of Caa3, with a negative outlook, to the government of the U.S. Virgin Islands. The Issuer Rating is equivalent to the rating Moody’s would assign to general obligation debt of the government. It serves as a reference point for the ratings on the territory’s special tax and enterprise revenue debt, the firm said. A Caa3 rating is judged to be of poor standing and is subject to very high credit risk.
Moody’s also lowered the rating on the territory’s Senior Lien Matching Fund Revenue Bond to Caa2 from Caa1. Caa2 is a notch lower than Caa3, but it is still judged to be of poor standing and subject to very high credit risk.
Other USVI bonds that Moody’s downgraded include: Subordinate Lien Matching Fund Revenue Bonds to Caa3 from Caa1; and its third lien Matching Fund Revenue Bonds, Subordinated Indenture (Diageo) and Matching Fund Revenue Bonds, Subordinated Indenture (Cruzan) to Caa3 from Caa2.
Read more: http://viconsortium.com/virgin-islands-2/moodys-downgrades-usvi-bonds-further-says-government-may-need-to-restructure-debt/