Moody’s impact on Bim

Ratings slip will make investment hard to come by

   Two days after the Government’s bond rating was downgraded, a global auditing firm has warned that Barbados could now find it increasingly difficult to secure investors for private-public partnership (PPP) projects.

    Partner at PricewaterhouseCoopers Canada, Richard DesLauriers, says Caribbean islands with low credit ratings have a very low chance of attracting
quality investors.

Delivering the keynote address at Day 2 of the CIBC FirstCaribbean Infrastructure Conference at the Hyatt Regency in Trinidad, DesLauriers told business officials that private investors would take into consideration Government’s credit worthiness before they “jump” into PPP projects.

“At the end of the day a PPP project is a long-term commitment between investors and government; that private investors will deliver the infrastructure and the services required and the term that government will pay for it over a long period, which tends to be about 30 to 35 years. For a private investor to do that, they have to have confidence that the government will in fact pay them over that period and they measure that confidence against the credit rating,” he said.

He said even with well structured and planned PPPs, investors would shy away if the country did not have a good credit rating.

“A lot of countries in the Caribbean do not have [good] investment credit ratings. Some of them do, but most of them do not; and that just makes it very difficult to get things done. Credit enhancement is a solution. That is something that should be considered,” advised DesLauriers, as he also noted that “projects in the Caribbean often take a long time to get going from the drawing board to financial quotes”, which was not good for business.

Pointing out that starting a PPP project could be “troublesome and disruptive for people in Government and the public”, he said it was also important that Government
be committed and have experts in the requisite departments, along with proper regulatory framework.

DesLauriers said when starting PPP projects it was also important to get international bidders since they bring knowledge and competition.

The official also suggested that the region be marketed as a single space for PPP projects instead of doing so by individual territories, since some islands were “too small”.

9 Responses to Moody’s impact on Bim

  1. Oral Phillips
    Oral Phillips June 5, 2014 at 6:51 am

    But wait… Dennis Kellman ain’t say last week that investors falling over one another to invest in Barbados ?

    Reply
  2. David Hall June 5, 2014 at 8:09 am

    “Caribbean islands with low credit ratings have a very low chance of attracting quality investors”.

    I Believe that the experience of the average Barbadian when forced to face the financial and lending institutions with a poor credit rating little or nothing to show by way of collateral has taught us how shabbily one can be treated. Furthermore the recent loan with the astronomically high interest rate which Barbados negotiated also reminded us of that; Yet seemingly none of these experiences mean a thing to our current government. Maybe it is because all the current government ministers are in a position to ensure that they all leave the corridors of government with a nest egg large enough to last them and their families for decades even if through a devaluation or otherwise the average person is left catching/clutching their royals.

    Reply
  3. David E Hall
    David E Hall June 5, 2014 at 8:09 am

    I Believe that the experience of the average Barbadian when forced to face the financial and lending institutions with a poor credit rating little or nothing to show by way of collateral has taught us how shabbily one can be treated. Furthermore the recent loan with the astronomically high interest rate which Barbados negotiated also reminded us of that; Yet seemingly none of these experiences mean a thing to our current government. Maybe it is because all the current government ministers are in a position to ensure that they all leave the corridors of government with a nest egg large enough to last them and their families for decades even if through a devaluation or otherwise the average person is left catching/clutching their royals.

    Reply
  4. David E Hall
    David E Hall June 5, 2014 at 8:09 am

    I Believe that the experience of the average Barbadian when forced to face the financial and lending institutions with a poor credit rating little or nothing to show by way of collateral has taught us how shabbily one can be treated. Furthermore the recent loan with the astronomically high interest rate which Barbados negotiated also reminded us of that; Yet seemingly none of these experiences mean a thing to our current government. Maybe it is because all the current government ministers are in a position to ensure that they all leave the corridors of government with a nest egg large enough to last them and their families for decades even if through a devaluation or otherwise the average person is left catching/clutching their royals.

    Reply
  5. Frederick Alleyne
    Frederick Alleyne June 5, 2014 at 9:13 am

    Don’t worry about any of these matters the government getting ready to play mas. Crop Over here we come.

    Reply
    • Sanderson Rowe June 5, 2014 at 12:53 pm

      And the theme of the Government’s jump up band this year is ” Nero fiddles while Rome burns” or ” The crop is really and finally over.”

      Reply
  6. Princess Tiny Neferua
    Princess Tiny Neferua June 5, 2014 at 9:28 am

    Yes….Fredrick.DEM will address this matter after the 1st monday in August..right now..nobody ain’t got time for that..because it ain’t like things will change within the next year or so………

    Reply
  7. Anson Sobers
    Anson Sobers June 5, 2014 at 8:02 pm

    Is this the same Canada where Donville said yesterday that has investors that want to invest in Barbados

    Reply

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