REVIEW OF THE ECONOMY 2013
42
SUSTAINING GROWTH, SECURING PROSPERITY
TRINIDAD AND TOBAGO CREDIT
RATINGS
Trinidad and Tobago is currently rated by three
international rating agencies: Moody’s Investors
Service (Moody’s); Standard & Poor’s Rating
Services and the Caribbean-based Caribbean
Information and Credit Rating Services Limited
(CariCRIS). The economy continues to exhibit
solid economic performance and remains
one of the most resilient in the Caribbean. The
government has taken numerous steps to
improve the regulatory environment to support
business activity and maintain commitments to
savings through the Heritage and Stabilisation
Fund (HSF). As such, Trinidad and Tobago
continues to enjoy investment grade status with
a stable outlook.
MOODY’S INVESTORS SERVICE
Following its ratings review exercise in January
2013, Moody’s Investors Service (Moody’s)
reaffirmed Trinidad and Tobago’s ratings at
Baa1 for Government Bonds in both foreign and
local currency together with a Stable Outlook.
The affirmation recognised the strengths of
the Trinidad and Tobago economy as reflected
by the sustained flexibility of the government’s
fiscal operations despite the deterioration
of some fiscal indicators; significant fiscal
savings in a sovereign wealth fund; a strong
external position reinforced by consistent
current account surpluses and a large foreign
exchange reserve buffer; and a challenging
growth outlook contingent on the resumption
of activity in the energy sector following a
protracted recession. Moody’s ratings were
tempered by the small size of the economy, a
limited degree of diversification, concerns about
the medium-term growth prospects and the
relative weakening of fiscal and debt metrics. A
stable outlook balances the recent deterioration
in fiscal and debt positions and the downside
risks to growth, against significant fiscal savings,
related to Carnival 2013. Also contributing to the
increase in Letters of Guarantee issued in favour
of Statutory Authorities, during fiscal 2013,
was a US$30 million increase in the Water and
Sewerage Authority’s (WASA) existing revolving
credit facility of US$30million, bringing the total
facility to US$60 million.
Debt Service
During the fiscal year, Central Government
Debt Service is estimated at $4,174.4 million, an
increase of $566.3 million (15.7 percent) over
the previous year. Domestic Debt Service, which
accounts for 75.1 percent of total debt service
obligations, is projected at $3,133.2 million for
the year, an increase of 25.0 percent ($625.8
million). External Debt Service is however
anticipated to be 5.4 percent lower for the fiscal
year at $1,041.2 million.
Open Market Operations
4
During the current fiscal year, the Government
issued two bonds under the authority of
the Treasury Bonds Act, 2008 Chap 71:43
to assist in domestic liquidity management
through the sterilisation (holding) of the bond
proceeds at the Central Bank. The $1,000
million 7-year, 2.60 percent bond, issued on
May 21, 2013 was oversubscribed with the
total bids amounting to $2,754.9 million. On
August 6, 2013, the second Treasury Bond, in
the amount of $1,000 million, was offered at a
tenor of 10 years and 2.50 percent. This issue
was however, undersubscribed with the total
bids amounting to $559.2 million. This under-
subscription was attributed to competition from
an alternative investment product being offered
simultaneously to investors.
4
Open Market Operations are excluded in the calculation of
Net Public Sector Debt but are included in the calculation of
Gross Public Sector Debt.
CENTRAL GOVERNMENT OPERATIONS
