Credit agency keeps Cayman’s high rating

(CNS): Moody’s, the international credit rating agency, has maintained Cayman’s Aa3 rating for government’s bonds issued in foreign and local currency, and an Aaa rating as a country ceiling, according to a press release from the Ministry of Finance and Economic Development. Minister Chris Saunders noted the significance of retaining the rating, given the health crisis. “Considering the record number of countries that have been downgraded as a result of the global pandemic, the reaffirmation of our rating as well as the ‘stable’ outlook is testimony to the strength of our people and our economy,” he said.

“This is an achievement that all Caymanians and those who call the Cayman Islands home should be proud of as it shows that our collective sacrifices have not been in vain,” Saunders added.

The “high” rating for the Cayman Islands Government positively affects all economic activity within the Cayman Islands. For example, while the new finance minister has pledged to avoid any new borrowing if possible, keeping the high rating means that if government was to seek new borrowing beyond the line of credit it has already secured, it could expect to secure a competitive interest rate, which keeps public spending down.

The release said the rating “should inspire businesses’ and investors’ confidence in the Cayman Islands – which, in turn, leads to higher levels of investment in the Islands and that should translate into greater job opportunities for the public”.

Cayman has a long history of having a stable political environment, policy continuity, high government effectiveness and sound financial management that has produced consecutive years of fiscal surpluses and a decreasing debt burden – which is key support for economic development. Debt-to-GDP was 5.5% in 2019, which is a fraction of the 39% of GDP median for similarly rated countries, the release said.