Fitch downgrades Jamaica's IDRs

Fitch Ratings downgraded Jamaica's long-term foreign and local currency issuer default ratings (IDRs) to RD, from C, the ratings agent said in a report. Fitch also lowered Jamaica's short-term foreign currency IDR to D, from C, and affirmed the country's debt ceiling and international unsecured debt instruments at B-, and CCC, respectively. The downgrade stems from Jamaica's recently launched debt exchange which Fitch believes adversely impacts the original contractual terms of domestic bondholders, and thus regards as a distressed debt exchange. "As Jamaica's Eurobonds were not affected by the exchange, Fitch has affirmed these securities at 'CCC'. The country ceiling remains at 'B-,'" Fitch added. The debt exchange, which was a pre-condition for US$750mn of IMF funding, will facilitate fiscal consolidation and reduce near-term financing needs, Fitch said. Fitch plans to raise Jamaica's rating out of default following an assessment of its credit profile and debt structure.