Above: Grenada (CJ Photo)

By the Caribbean Journal staff

Standard & Poor’s has lowered its foreign and local currency sovereign credit ratings on Grenada to “SD” from “CCC+/C,” citing the announcement that the country would not pay its coupon due March 15.

That coupon is due on the country’s US dollar and Eastern Caribbean dollar-denominated bonds due in 2025.

The government also said it did not expect to have the funds to pay the coupon during the relevant grace periods, though it plans to service its treasury bills registered in the regional government securities market.

In October, the New York-based ratings firm lowered Grenada’s foreign currency rating to “SD,” after the government failed to pay a coupon due Sept. 15 on time on a $193 million bond due in 2025. It later raised the rating after the full payment was made.

Grenada last restructured its debt in 2005, and now plans a new restructuring, Prime Minister Dr Keith Mitchell announced last week.

Once the government cures its foreign currency debt default, we will assign forward-looking foreign and local currency ratings,” said Joydeep Mukherji, credit analyst at S&P. “We expect that the country’s poor prospects for economic growth, along with low external liquidity, will continue to constrain the government’s overall finances and the new rating.”