Grenada denies it is in default to CDB
ST GEORGE’S, Grenada — The Grenada government Wednesday denied reports that it was partly responsible for the downgrading of the Barbados-based Caribbean Development Bank (CDB) by the United States rating agency.
Last week, Standard & Poor’s (S&P) downgraded the long-term rating of the CDB to AA and warned that the ratings could plunge even lower if a regional government borrower fails to “clear its arrears” with the financial institution.
S&P said that the decision to lower the ratings from AA+ to AA reflects “embedded credit risks in CDB’s loan portfolio.
“Our view of the treatment of CDB as a preferred creditor by its borrowing member shareholders, which is established by practice, is a pivotal component of this analysis.
“We could lower our ratings on CDB if the government borrower is more than 180 days in arrears and does not clear its arrears with the CDB, if other member governments fall more than 180 days past due, or if, contrary to our expectation, the bank’s funding conditions or liquidity weaken.”
S&P has not named the offending government in arrears of more than 180 days but sources with knowledge of the matter have told the Caribbean Media Corporation (CMC) that Grenada is the country being referred to by the US-based rating agency.
However, speaking on a radio programme here on Wednesday, Information Minister Glen Noel said that the island does not have a problem regarding its payment to the Barbados-based financial institution.
He told listeners that all of the five CDB-funded projects were on stream, reiterating that the Tillman Thomas administration had not encountered problems in meeting its financial obligations to the bank.
“Generally, when you default you have a problem. We don’t have a problem, everything is flowing smoothly,” Noel said, claiming that critics of the government were looking for ways to blame Grenada for the decision by the US rating agency to downgrade the CDB.
“There are several countries that are attached to the CDB and they may very well be in default. It is not Grenada,” he insisted.
