February 22, 2013 / 7:16 PM / 5 years ago

TEXT - Fitch cuts Jamaica's issuer default ratings to 'RD'

Feb 22 - Fitch Ratings has downgraded Jamaica's ratings as follows:

--Long-term foreign currency (FC) and local currency (LC) Issuer Default Ratings
(IDRs) to 'RD' from 'C';

--Short-term FC IDR to 'D' from 'C'.

The country ceiling is affirmed at 'B-' and international senior unsecured debt 
instruments at 'CCC'.


The downgrade of Jamaica's sovereign ratings reflects the following key rating 

The government has announced that it has achieved an over 97% participation rate
in the domestic debt exchange offer launched on Feb. 12 2013. It will proceed 
with the settlement for bondholders that have tendered in the exchange and will 
extend the offer for the remainder until Feb. 28, 2013.  Fitch believes this 
operation constitutes a Distressed Debt Exchange (DDE), as the debt exchange 
adversely impacts the original contractual terms of domestic bondholders. 

The debt exchange included USD-denominated domestic debt securities to which 
Fitch's FC IDR applies. As a result, both the Sovereign FC and LC IDRs have been
lowered to 'RD' from 'C'. Fitch has also downgraded the short-term foreign 
currency rating to 'D'.

As Jamaica's Eurobonds were not affected by the exchange, Fitch has affirmed 
these securities at 'CCC'. The country ceiling remains at 'B-'. 


Jamaica's ratings will soon be raised out of default following the conclusion of
Fitch's assessment of Jamaica's prospective credit profile and debt structure. 


Fitch believes that the execution of the debt exchange operation will facilitate
fiscal consolidation and reduce near-term financing needs. The debt exchange is 
one of the pre-conditions for Jamaica to sign a new IMF agreement amounting to 
approximately USD750 million.

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