S&P Global Ratings said it has lowered its rating on the Virgin Islands Public Finance Authority's (VIPFA) senior-lien matching fund notes to B from BB and its rating on subordinate-lien matching fund notes, issued for the U.S. Virgin Islands (USVI), by two notches to B from BB-minus.
S&P also lowered its rating on the VIPFA's gross receipts tax (GRT) loan notes, issued for the U.S. Virgin Islands (USVI), to B-minus from B.
The outlook is negative.
"The downgrade reflects our view of the USVI's constrained market access following the inability of the territory to sell senior- and subordinate-lien parity bonds after a rescheduled sale date and an attempt to go to market in January," said S&P Global Ratings credit analyst Oladunni Ososami, "as well as our view that credit quality could deteriorate further due to liquidity concerns if the USVI can't access external liquidity or make significant structural budget changes to address its cash flow needs in the near term."
