Stand and Poor's releases full credit rating analysis for Turks and Caicos Islands

The Turks and Caicos’ first-ever credit rating could rise (on the release of more comprehensive economic data) or fall (if the nation’s political consensus weakens), international bond ratings house Standard and Poor’s announced with the release of its full credit rating analysis for the country.

The detailed August report, which followed a month behind the release of the nation’s favorable BBB+ sovereign credit rating, outlined the logic behind S&P’s rating of the creditworthiness of the Turks and Caicos Government. For government ministers, the report stands as both a road map and a warning, signalling what actions will influence future ratings – and drive borrowing costs.

S&P analysts touted the nation’s prosperous economy, its now favorable asset position, its “well-developed” tourism sector, and a steadily expanding GDP. They also pointed out that TCI’s close relationship with the United Kingdom “serves as an anchor for economic polices and judicial and institutional stability.

“The (islands’) stable outlook is based on our expectation of successful implementation of recent measures designed to modernize the public sector and strengthen governance. We believe that these measures, coupled with our projection of continued economic growth averaging 3 percent annually, will contribute to a gradual reduction in the central government's debt burden over the next few years,” the analysts wrote.

The agency went on to suggest that it might improve the ranking if the nation’s economic performance “materially exceeds” its anticipated 3 percent GDP growth rate over the coming three years, or if the nation were to provide more comprehensive external economic data, thereby reducing uncertainty.

But it warned that a downgrade could be in order if the nation wavers in its commitment to fiscal discipline and its long-term development strategy.

“Our Government is firmly committed to broadening and strengthening our islands’ economy,” said Finance Minister Honourable Washington Misick. “This objective and independent analysis will help us make this a reality and attract new investment to our islands.”

TCG's BBB+ rating is considered a step above the entry-level rating in what S&P calls its “Investment Grade” class of ratings.