Moody’s upgrades Belize, debt to B3

Moody's Investors Service said it upgraded the Government of Belize's long-term foreign- and local-currency issuer and senior unsecured ratings to B3 from Caa2.

The outlook is stable.

Moody’s said the key drivers of the upgrade are: (a) The improvement in the government's debt service profile and reduction in the risk of a subsequent credit event following the recent restructuring of the government's debt; and (b) lingering macroeconomic and fiscal vulnerabilities and risks to debt sustainability which constrain Belize's creditworthiness within the low B category.

“The stable outlook reflects the balanced risks to Belize's credit profile at the B3 rating level,” Moody’s said in a news release.

“The risk of a subsequent credit event remains low through the outlook horizon, given the government's more favorable debt payment schedule. However, fiscal and economic challenges are likely to persist and Moody's believes that, despite the liquidity relief provided by the debt restructuring, there is a low likelihood that upward pressure on Belize's creditworthiness will develop over the next 12 to 18 months.”

Concurrent with this action, the agency also raised Belize's long-term foreign-currency bond ceiling to B1 from B2 and long-term foreign-currency bank deposit ceiling to Caa1 from Caa3.

The short-term foreign-currency deposit and bond ceilings are unchanged at Not Prime (NP).

Finally, the long-term local-currency bond and deposit ceilings were raised to B1 from B2.

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