Barbados’ credit rating has been again upgraded, the second in recent months, after a long series of downgrades over the past several years. It’s a direct result of the recent successful renegotiation of the government’s domestic debt. The Caribbean Information and Credit Rating Services Limited (CariCRIS) today announced it has upgraded the Regional Scale Local Currency rating of the Government of Barbados from CariD, or default, to CariBB, with a stable outlook.

However, CariCRIS  has maintained the Regional Scale Foreign Currency rating of CariD (Default) on the country’s foreign currency denominated debt. According to CariCRIS, the Local Currency Regional Scale rating indicates that the level of creditworthiness of the government of Barbados, adjudged in relation to other rated governments in the Caribbean, is below average.

On the upside, however, the regional credit ratings agency says their  decision to upgrade the rating on the local currency debt is driven by the closure of the exchange offer for domestic, that is, Barbados dollar-denominated debt. CariCRIS states that this marks the successful completion of the restructuring of 11.9 billion Barbados dollars in Barbados dollar-denominated claims on the Government of Barbados and its public sector. The ratings agency adds that the restructuring is a central plank of the Government of Barbados’ Comprehensive Debt Restructuring Programme and the Barbados Economic Reform and Transformation (BERT) Plan.

But CariCHRIS says they have maintained their rating of CariD on the foreign currency debt as negotiations with foreign debt holders are not yet concluded. The agency says that upon successful completion of these negotiations, they will similarly revise upward their ratings on the country’s foreign currency debt.

Outgoing President of the Barbados Economics Society Shane Lowe says Barbados needs to continue to work on having its credit rating returned to investment grade.