S&P cuts Jamaica, outlook negative on default risk

NEW YORK, Nov 2 (Reuters) - Standard & Poor's said on Monday it downgraded Jamaica one notch, to "CCC" and kept the negative outlook on the island credit following the resignation of the central bank governor, the lead negotiator of a possible standby agreement with the International Monetary Fund.

S&P downgraded Jamaica's credit rating to "CCC" from "CCC-plus" and kept a negative outlook on the ratings, signaling the growing risk of a debt exchange operation that could be an event of selective default.

"Jamaica's severe fiscal situation as well as the vulnerabilities in the government's debt profile may give it incentives to renegotiate with its creditors, particularly its resident creditors that hold the larger bulk of Jamaican debt," S&P said in a statement.

"Since then, the government's room to maneuver continues to narrow as it becomes increasingly difficult to further cut public expenditures in order to sustain an interest burden of about 60 percent of general government revenue."