Third World country Canada gets AAA rating renewed

[Scaly Spurs]

Ok looked it up, It is a B3 and this was published on Wed

Jamaica has worst debt-to-revenue ratio in Moody's rating universe

Published: Wednesday | July 27, 2011 11 Comments

• Lacklustre growth predicted

Steven Jackson, Business Reporter
Jamaica's sovereign bond rating will remain stable at 'B3', or three grades from default, provided there are no external shocks, says Moody's Investors Services.
"Shocks that could push Jamaica again to default would include a powerful hurricane, a global liquidity crunch affecting Jamaica's access to foreign financing, a softening of foreign exchange inflows due to a global slowdown affecting tourism and/or another similar shock affecting the exchange rate," said Moody's in its annual outlook on Jamaica published July 11.
Political shocks could also affect the rating.
The country would need to double its growth rate to about "1.5 per cent a year" for a decade or balance the budget in order to inspire a rating upgrade, all things equal, Moody's indicated.
"Jamaica's B3 foreign and local currency government bond ratings reflect the country's low economic development, moderate institutional strength, weak government finances, and high susceptibility to shocks. A high tolerance for fiscal austerity measures among its population, and the country's broad consensus on economic policies support our view of moderate institutional strength, a key support for the rating," the ratings agency said.
Jamaica scored the highest external vulnerability indicator (EVI) at 99 when compared with its rating peers, including Argentina, Pakistan, Nicaragua and Belize. The median score was 54.
"EVI is the ratio of maturing external debt and non-resident foreign currency deposits to external reserves. The higher the EVI, the higher the vulnerability," said Moody's.
The rating agency projects growth at 1.4 per cent, the local dollar at J$92 to US$1 and inflation of 5.8 per cent by 2012.
The external [COLOR=blue !important][COLOR=blue !important]debt[/COLOR][/COLOR], however, is projected to remain largely unchanged at US$10.6 billion in 2012, up from US$10.1 billion in 2011, with central government debt to GDP at 115 per cent for the fourth consecutive year.
General government interest payments compared with general government revenues will dip from 40.8 per cent to 33.6 per cent in 2012, according to Moody's predictions.
Another advantage
The rating agency added that eliminating the fiscal deficit would give the country the ability to grow the economy and increase its potential for a rating upgrade.
"With that in mind, the Govern-ment has set a target of a balanced fiscal result by 2015. If this is accomplished it will represent a significant credit positive for the sovereign, though it will not be an easy task. As part of the effort the Government has revamped its budgeting process and divested itself of several loss-making enterprises," the report stated.
"The Standby Arrangement with the International Monetary Fund is seen as credit-positive as fiscal performance evaluations are to be performed periodically. These are the kind of reforms and procedures that can take some time to show their effectiveness, but last year's actions are an important first step."
It added that while Jamaica's per capita GDP is higher than the B-rating category median, the grade is based on annual growth that has averaged less than 1.0 per cent in the last decade, and the country being in recession for the past three years.
Lack of growth makes reducing the debt burden difficult, says the rating agency, and the country's debt-to-revenue ratio remains among the highest in its rating category "in the Moody's rating universe", even after last year's domestic debt exchange.
"While the 2010 domestic debt exchange improved the Govern-ment's fiscal position by dramatically reducing the interest burden, debt levels remain much higher than those of most of Jamaica's rating peers, giving the country little room to manoeuvre," said Moody's.
"Jamaica's stable outlook reflects Moody's views that changes to the Government's bond ratings are unlikely to change, given the country's still-high debt burden and low economic growth. While the economy will likely grow in 2011, future growth is expected to remain subdued, and fostering faster growth will remain a key policy challenge."
Jamaica's total debt was recorded at J$1.57trillion in April. The country projects revenue collections of J$350 billion, inclusive of grants, this fiscal year.
steven.jackson@gleanerjm.com

[Scaly Spurs]

Ratings guide lines

Jamaica has worst debt-to-revenue ratio in Moody's rating universe

Published: Wednesday | July 27, 2011 11 Comments

• Lacklustre growth predicted

Steven Jackson, Business Reporter
Jamaica's sovereign bond rating will remain stable at 'B3', or three grades from default, provided there are no external shocks, says Moody's Investors Services.
"Shocks that could push Jamaica again to default would include a powerful hurricane, a global liquidity crunch affecting Jamaica's access to foreign financing, a softening of foreign exchange inflows due to a global slowdown affecting tourism and/or another similar shock affecting the exchange rate," said Moody's in its annual outlook on Jamaica published July 11.
Political shocks could also affect the rating.
The country would need to double its growth rate to about "1.5 per cent a year" for a decade or balance the budget in order to inspire a rating upgrade, all things equal, Moody's indicated.
"Jamaica's B3 foreign and local currency government bond ratings reflect the country's low economic development, moderate institutional strength, weak government finances, and high susceptibility to shocks. A high tolerance for fiscal austerity measures among its population, and the country's broad consensus on economic policies support our view of moderate institutional strength, a key support for the rating," the ratings agency said.
Jamaica scored the highest external vulnerability indicator (EVI) at 99 when compared with its rating peers, including Argentina, Pakistan, Nicaragua and Belize. The median score was 54.
"EVI is the ratio of maturing external debt and non-resident foreign currency deposits to external reserves. The higher the EVI, the higher the vulnerability," said Moody's.
The rating agency projects growth at 1.4 per cent, the local dollar at J$92 to US$1 and inflation of 5.8 per cent by 2012.
The external [COLOR=blue !important][COLOR=blue !important]debt[/color][/color], however, is projected to remain largely unchanged at US$10.6 billion in 2012, up from US$10.1 billion in 2011, with central government debt to GDP at 115 per cent for the fourth consecutive year.
General government interest payments compared with general government revenues will dip from 40.8 per cent to 33.6 per cent in 2012, according to Moody's predictions.
Another advantage
The rating agency added that eliminating the fiscal deficit would give the country the ability to grow the economy and increase its potential for a rating upgrade.
"With that in mind, the Govern-ment has set a target of a balanced fiscal result by 2015. If this is accomplished it will represent a significant credit positive for the sovereign, though it will not be an easy task. As part of the effort the Government has revamped its budgeting process and divested itself of several loss-making enterprises," the report stated.
"The Standby Arrangement with the International Monetary Fund is seen as credit-positive as fiscal performance evaluations are to be performed periodically. These are the kind of reforms and procedures that can take some time to show their effectiveness, but last year's actions are an important first step."
It added that while Jamaica's per capita GDP is higher than the B-rating category median, the grade is based on annual growth that has averaged less than 1.0 per cent in the last decade, and the country being in recession for the past three years.
Lack of growth makes reducing the debt burden difficult, says the rating agency, and the country's debt-to-revenue ratio remains among the highest in its rating category "in the Moody's rating universe", even after last year's domestic debt exchange.
"While the 2010 domestic debt exchange improved the Govern-ment's fiscal position by dramatically reducing the interest burden, debt levels remain much higher than those of most of Jamaica's rating peers, giving the country little room to manoeuvre," said Moody's.
"Jamaica's stable outlook reflects Moody's views that changes to the Government's bond ratings are unlikely to change, given the country's still-high debt burden and low economic growth. While the economy will likely grow in 2011, future growth is expected to remain subdued, and fostering faster growth will remain a key policy challenge."
Jamaica's total debt was recorded at J$1.57trillion in April. The country projects revenue collections of J$350 billion, inclusive of grants, this fiscal year.
steven.jackson@gleanerjm.com

This is what it means.....

Investment grade

• Aaa: Moody judges obligations rated Aaa to be the highest quality,[11] with the "smallest degree of risk".[12]
• Aa (Aa1, Aa2, Aa3): Moody judges obligations rated Aa to be high quality, with "very low credit risk",[11] but "their susceptibility to long-term risks appears somewhat greater".[12] (AA+, AA and AA- in S&P)
• A (A1, A2, A3): Moody judges obligations rated A as "upper-medium grade", subject to "low credit risk",[11] but that have elements "present that suggest a susceptibility to impairment over the long term".[12] (A+, A and A- in S&P)
• Baa1, Baa2, Baa3: Moody judges obligations rated Baa to be "moderate credit risk".[11] They are considered medium-grade and as such "protective elements may be lacking or may be characteristically unreliable".[12]

Speculative grade (also known as "High Yield" or "Junk")

• Ba1, Ba2, Ba3: Moody judges obligations rated Ba to have "questionable credit quality."[12]
• B1, B2, B3: Moody judges obligations rated B as speculative and "subject to high credit risk",[11] and have "generally poor credit quality."[12]
• Caa1, Caa2, Caa3: Moody judges obligations rated Caa as of "poor standing and are subject to very high credit risk",[11] and have "extremely poor credit quality. Such banks may be in default..."[12]
• Ca: Moody judges obligations rated Ca as "highly speculative"[11] and are "usually in default on their deposit obligations".[12]
• C: Moody judges obligations rated C as "the lowest rated class of bonds and are typically in default,"[11] and "potential recovery values are low".[12]

Special

• WR: Withdrawn Rating[13]
• NR: Not Rated[13]
• P: Provisional

[edit] Short-term taxable ratings

• P-1 Moody judges Prime-1 rated issuers as having "a superior ability to repay short-term debt obligations".[14]
• P-2: Moody judges Prime-2 issuers as having "a strong ability to repay short-term debt obligations".[14]
• P-3: Moody judges Prime-3 rated issuers as having "an acceptable ability to repay short-term obligations".[14]
• NP: Moody considers "Not Prime" rated issuers as not falling "within any of the Prime rating categories".[14]

[OJ]

Not sure if you are trying to be humorous but Canada Economy is very strong and stable. One of the countries that was insulator from the many bank collapse due to it stringent banking laws and oversight.. the dollar is training very high 6 c more than the U.S

[Exile]

I hope you are having it without the coke.

[Islandman]

A nuh me boss, is Reggaedoc seh so. Me just a try figure out how him come to that conclusion.

Him say the Westminister system have a lot to do with it. Apparently no First World country would use that backward system of govt.

http://www.reggaeboyzsc.com/forum1/s...ad.php?t=42921

[Peter R]

This must be the continuation of some previous thread... I-man seems to be saying tongue in cheek that despite what some (Reggaedoc?)might classify as a third world country it is rated highly by the rating agencies.

I can say that for whatever reason people move to Canada there are a couple significant reasons why it is a better option than the US. and I am referring to places like Toronto, Montreal, Edmonton, Calgary and Vancouver for visible minorities though small towns can be friendly, but if you want to keep in touch with the diaspora a big city is better.

The health care system isn't perfect, but Obama would give his eye teeth to have one like it in place... another is the educational system. I just checked and the UN ranked the US 4th on the Human Development Index and Canada 8th , however, based on those two very important (to me) criteria alone I would give Canada the edge... my child can attend one of the best universities in the world McGill, (one did and one is still there) and pay less than $5000 US a year for tuition (as a Canadian citizen and about $12000 as a foreign student)...try that in the US at a private university not to mention Ivy League.

And ask two friends of mine (Jamaicans) who had Hodgkins Disease about the treatment they received without having to dig into their pockets. In America, without a health care plan you might be in trouble.

yes, taxes are higher than in America but the services you receive speak for themselves.

OJ, I know you are/were in Canada, what is your take?

Reggaedoc and others can pooh pooh Canada but it's just bad mind.

[Exile]

Is now yu telling mi bout the tuition?

[Peter R]

I thought you knew... the problem now is the canadian dollar is high... and will probably stay there in the foreseeable future according to the analysts.

[Reggaedoc]

Listen Pete, dont believe the hype. The best aspect of the Canadian healthcare system is its close physical proximity to the US. It takes patients no tinme to get to Buffalo, An Harbor, Cleveland etc. The best aspect of the Canadian educational system, is its distance from the British educational system in structure, and content.

[Reggaedoc]

I hope you are not confusing an expensive currency with a strong currency or a strong economy. I remember the years when the $Ja was more expensive than the $US. It never meant that the $Ja was stronger than the $US, or that the Jamaican economy was stronger than the US economy. In factit was the opposite that was true.

[Islandman]

The best aspect of the Canadian healthcare system is its close physical proximity to the US.

Wow!!

I dont' even think me bredrin and loyal patriot HL would go that far!

You are aware that OJ and PeterR have experience living in Canada? Or does that count for nothing?

[OJ]

Live here from over 30 years, and although we are taxed a bit more than the U.S its a wonderful country and true first world in every sense. First of all relating to the AAA rating it is a fact that the Canadian Banking system is the envy of the world. Very tightly regulated (some would say too much) and yes they were pretty much insulated from the meltdown. Health Care is as good. Can it be better yes, the only downfall is the wait times for some situation but the fact is you have access to the same health resources as the millionaire and you don't have to go in your pocket. The education system especially at the university level is amazing. You can go to a school the equivalent of harvard for 6000 a year.. Crime rate , multiculturalism is second to none. If you have ever spent a minute here you would know. True first world country.. the only thing i will say the taxes a bit high but you have to pay for benefits

[Willi]

Canada is in far better economic shape than the US now. Is this a joke or what?

You cannot be serious!

[Willi]

Tenk yuh!

[Willi]

Cosign all you say.

Tell the man about Canadian architecture, the CANDARM, the advances in medicine from McGill, the engineering prowess of Queens University, the fact that Concordia Computer engineering was the first school outside of the US to have VAX mainframes, the historical sophistication of Montreal, once the 2nd most important city in North America, the more established right of the FIRST Nations in Canada compared to the US, the egalitarian University system, the powerful Canadian Air force, the highly regarded RCMP, the long established BOMBARDIER metro system of Montreal, ...I could go on and on.

Anybody who takes Canada lightly is woefully ignorant orjust obtuse. I used to live there for 3 years, so I can vouch personally. Vive le Canada.