NEW YORK, Feb 14 (Reuters) - Moody’s Investors Service on Thursday put Jamaica’s sovereign rating on review for downgrade on a domestic debt exchange program that has already seen the country cut by two other major rating agencies this week.
Moody’s said in a statement it was placing Jamaica’s B3 on review “as a result of the authorities’ announcement that the government will pursue a debt restructuring involving a debt exchange that will affect US $9.1 million in domestic debt...”
“In Moody’s opinion, the debt exchange is likely to constitute a distressed exchange and, consequently, considered a default event by our definition.”
Rating agencies Fitch and Standard & Poor’s on Tuesday cut Jamaica’s ratings on the debt exchange program.
Standard & Poor’s cut Jamaica’s rating to SD, or selective default.
“Based on our criteria, we consider this exchange a default,” S&P said at the time.
Fitch cut the country to C.
“In Fitch’s opinion, the exchange, if completed, would constitute a ‘distressed debt exchange’ (DDE) in line with its criteria, as the operation adversely impacts the original contractual terms of domestic bondholders,” the agency said on Tuesday.
Jamaica has been in talks with the International Monetary Fund to discuss a new lending agreement that it hopes will steady the economy of the debt-ridden Caribbean nation.
On Monday, according to Thomson Reuters IFR, Jamaican Prime Minister Portia Simpson Miller announced plans to reduce the country’s debt as a pre-condition for implementation of a new IMF loan program.
The debt exchange offer seeks to exchange Jamaica’s domestically issued debt.