Sparta Report

S&P to Withdraw US Virgin Islands’ Credit Rating After Governor’s Threat

This is pretty typical of the behavior of a bankrupt state. When the credit rating downgrades get too embarrassing, bluster in front of the cameras about how “unfair” they are and stop cooperating with the ratings agencies.

S&P is going to pull the plug as a result if US Virgin Islands governor Kenneth Mapp doesn’t back off on his threats to cease cooperation:

S&P Global Ratings warned on Tuesday that it will withdraw its credit rating for the U.S. Virgin Islands within the next 30 days if the territory’s government stops providing information to the rating agency.

The U.S. Virgin Island indicated that it would “stop directly providing information to us,” as of Aug. 25, said S&P credit analyst Oladunni Ososami.

“We have learned that the territory intends to no longer provide us with the information we consider necessary to evaluate its liquidity, including interim reports which show its monthly cash balances,” said Ososami.

U.S. Virgin Islands Governor Kenneth Mapp announced on a local talk show in August that his territory had “severed our ties” with rating agencies following a set of downgrades by S&P and Fitch.

S&P downgraded the U.S. protectorate on Aug. 16 to CCC+ and CCC from B and B-. Fitch lowered its rating a day earlier to CCC from B, citing concerns about growing payables and liquidity pressures.

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