S&P Global Ratings downgraded Barbados' long-term and short-term local currency sovereign issuer credit ratings to SD, or selective default, from CC and C, respectively.
The debt watcher said Barbados on Aug. 2 made an "automatic" principal rollover on its principal payments on short-term local currency treasury bills, which is considered by S&P as paramount to default. The island country also carried out a similar maneuver July 11.
"We do not expect the government to make these payments in the near term," the rating agency said.
S&P also lowered its issue-level ratings on Barbados' global bonds due 2019 and 2022 to D, or default, from CC, after the country missed the coupon payments. The rating agency expects the government will not make those payments.
Barbados' long-term and short-term foreign currency sovereign credit ratings were affirmed at SD, said S&P. The ratings on the country's 6.625% notes due 2035 and 7.25% notes due 2021 were affirmed at D, and the local currency issue-level ratings on debt for which Barbados remains current were affirmed at CC.
In addition, S&P removed all ratings from CreditWatch with negative implications.
S&P expects Barbados to continue its dialogue with the International Monetary Fund regarding plans to boost financial support.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.