S&P: Bahamas on negative watch

Standard & Poor’s said it placed the BBB long-term and A-2 short-term foreign- and local-currency sovereign credit ratings on the Commonwealth of the Bahamas on CreditWatch with negative implications.

The negative watch reflects a view that the Baha Mar developer’s Ch. 11 reorganization filing could result in a prolonged delay in the opening of the $3.5 billion Baha Mar resort, the biggest in the country’s history, S&P said.

A delay could weaken the image of the Bahamas’ tourism brand and lead to lower economic growth, the agency said.

Due to concerns and delays with the Baha Mar project, the country may not receive the number of visitors it initially expected, tarnishing the reputation of the Bahamas’ tourism industry, which represents more than 50% of its GDP, S&P said.

The project developer may be unable to continue employing more than 2,000 workers already hired, let alone hire the additional 3,000 workers it planned to hire upon opening, if the dispute remains unresolved over the next couple of weeks, the agency added.

This may exacerbate the country’s already high unemployment rate, which was about 15.7% in November 2014, in a country with a population of about 370,000, S&P said.

The ratings on the Bahamas, however, continue to reflect the sovereign’s track record of generally prudent policies through different governments, which have underpinned a high level of per capita GDP and standards of living, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.