STANDARD & POOR (S&P) is a United States-based financial services company which offers, among its many services, credit ratings whereby it assigns credit scores to issuers of certain types of debt obligations, as well as the debt instruments themselves. S&P rates borrowers on a scale from AAA to D, moving through intervals of triple letter to single letter; intervals are further divided at each level between AA and CCC, which moves from positive through absolute to negative (e.g. 'AAA+', 'AAA', 'AAA-'). The movement of Jamaica from B- to CCC- means dropping two ranks (CCC+ and CCC).

implications

What are the implications of a credit score?

A credit score is used by investors (lenders) to assess the credit risk of a borrower. This includes the ability and likelihood of the borrower to repay debt on a timely basis - the probability that the issuer of debt will default on its obligations to repay. The lower the credit score the greater is the conceived credit risk - the more unwilling investors will be to invest and the higher the credit risk premium will have to be to attract investment, meaning higher interest rates and stricter loan terms putting even greater pressure on the borrower.

The credit rating assigned is based on a point in time analysis, so if it is that things have turned around since the date of the data used for the analysis, it is possible for the Government to have the revised data forwarded to the rating agency so they can revise their scoring. Staying at home and saying it is not so will not help our situation, we need to try and have the score revised, as this is what potential investors are looking at.

It would help much if in our own local squabble we do not discredit our country and lower the credit rating even further. There will be a time when we can all cuss out but let us be responsible about the things we say, as others are watching and listening!

I am, etc.,

Angela Bisasor

a.bisasor@gmail.com