The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

PRIME Minister Perry Christie and State Minister for Finance Michael Halkitis met with representatives of rating agencies yesterday to discuss this country’s credit rating future amid continued uncertainty about Baha Mar.

During the morning House of Assembly session, Mr Christie said: “Given the pressing times in which we live and the kinds of challenges which we face, we’ll be excused for a short period and I’ll take the minister with me and return him quickly to the Parliament.”

Mr Christie’s statements came as government officials provided no details yesterday on the status of negotiations with Baha Mar and its Chinese partners, which began on Monday in China.

According to a source close to the talks, representatives of China State Construction, China Export-Import Bank and Baha Mar continued to negotiate yesterday even as the Bahamian government’s delegation was expected to return to the country yesterday evening.

Up to press time it was unclear how long the two sides would continue to negotiate, with The Tribune’s source claiming that Baha Mar had been experiencing difficulty getting China Construction America to agree to certain things.

However, a well-placed source in the Christie administration yesterday said talks had broken down, with Baha Mar refusing to drop its Chapter 11 bankruptcy filing in the United States and lawsuits against its general contractor.

As for the country’s credit rating, State Minister for Investments Khaalis Rolle admitted that a credit rating reduction would have a negative impact on the country but expressed optimism that the disputes surrounding Baha Mar will be resolved before this could take place.

“I suspect (a rating reduction) will have an impact but I don’t know that it is going to deter us from continuing to work hard to ensure that our fiscal house remains in order,” he said. “It may mean that from a borrowing perspective, the cost of borrowing for the government would go up a bit but if we are able to continue to drive the fiscal reforms that we have been doing, I believe whatever impact it has will not be long-term.”

He said: “We’re cautiously optimistic that we will get this conflict with Baha Mar resolved relatively quickly and if we’re able to do that, that should not have a negative impact on how the rating agencies view us. I know many of them were counting Baha Mar but they didn’t put significant emphasis on it. We’re still continuing to grow and to perform from a fiscal standpoint without Baha Mar being there so we anticipate that the short-term impact should not be negative.”

The Tribune previously reported that the country faces at least a 50 per cent chance of a sovereign credit rating downgrade within a matter of months after Standard & Poor’s (S&P) placed the nation on negative credit watch because of Baha Mar’s Chapter 11 filing.

The agency warned that it is possible the country could lose its “investment grade” status, suggesting it could lower this nation’s rating “by one or more notches” if there is either a “prolonged delay” to open Baha Mar or a complete failure for the resort.