The U.S. Virgin Islands responded to Fitch Ratings’ withdrawal of the islands’ ratings by saying that the government will directly provide financial information to investors.
On Thursday morning Fitch withdrew its B rating on the Virgin Islands Finance Authority’s senior matching funds and gross receipts tax bonds. Fitch also withdrew its CCC Virgin Islands government issuer default rating. Fitch cited a lack of information from the government.
In August Gov. Kenneth Mapp said his government will no longer be sharing information with the ratings agencies. He and his government have said the agencies’ ratings were unfair.
A spokesman for the U.S. Virgin Islands said, “The USVI government has disengaged from dealing directly with the rating agencies and will communicate directly with our investors in a proactive and transparent manner. We will report our financials via the Electronic Municipal Marketplace Access site and, in the next few days, we will launch Bondlink, a website from the USVI Public Finance authority that will contain information on USVI finances, with the latest news on our recovery efforts.
“We also plan to speak directly with the investment community via conference calls with our financial team,” the USVI spokesman said.
“The investment community should also be aware that our bond payments to our investors are secure,” he continued. “Bond proceeds from our rum bonds go directly to our trustee for payment to bondholders and never are commingled. Funds set aside to our trustee have been made through 2017 and 2018, and reserves cover 2019 bond payments.”
The senior matching funds bonds are rated Caa1 by Moody’s Investors Service and CCC-plus by S&P Global Ratings. The senior gross receipts tax bonds are rated CCC by S&P.
On Sept. 14 in a report on the Virgin Islands, Moody’s senior vice president Kenneth Kurtz, vice president Nicholas Samuels, and managing director Timothy Blake said, “The government announced in August that it was severing ties with rating agencies. As a result we do not expect that it will be providing us with detailed information about the impact of the hurricane on its liquidity position.
"We are currently assessing whether publicly available information is sufficient to maintain the ratings on the matching fund bonds going forward," they said. "Nevertheless, we are confident that the existing ratings on the bonds accurately capture, at this time, the risks described above.”