Moody’s Predicts Loss for Bondholders

The 2014-2015 budget speech is expected to read after the March fourth Town Council elections and while there is a three percent economic growth to boast, the rating agency Moody’s is predicting a possibility that bond holders may not get their expected yields. A release issued today says that bond holders are facing strong risks of losses and that debt sustainability is fragile for the country. According to the report, there are risks to fiscal performance over the next two to three years. The economic forecast is attributed to a twenty percent fall in oil production from January through to August 2014 when compared to the previous year. Oil production is expected to fall to less than five hundred thousand barrels. Moody also says that the country’s primary surplus, or budget balance before interest payments, will shift to a deficit in 2015. Moody’s rates the country Caa-Two, eight levels below investment grade and in the same category as Cuba.