The new credit rating may be low but it sends a crucial message to the international financial community: Grenada is moving back from the brink of financial ruin. Standard & Poor's Rating Service has sent that word out to investors and institutions which want to do business with or otherwise put their money into Grenada, a year after its country's infrastructure was almost totally wiped out and it was pushed close to economic ruin when Hurricane Ivan devastated the Eastern Caribbean state in 2004. "It is a low rating but it's an indication of how far Grenada has come," said Helena Hessel, a S&P credit analyst in New York in announcing that the world's foremost provider of independent credit ratings, indices, risk evaluation and investment research had raised Grenada's long-term foreign currency sovereign credit rating from "selected default" to B-minus and its short term foreign currency credit rating from selected default to "C." Just as important, S&P upgraded its outlook on the long-term rating from negative to stable. It also moved Grenada;s long-term local currency rating from Triple C and to B while affirming. At the same time S&P affirmed its "B-minus" rating on the Eastern Caribbean nation's successful exchange of $193 million "step-up" bonds and of (Eastern Caribbean currency) $184 million in "Step-up" bonds, all due in September 15,2025. They were exchanged for principal and past-due interest through September 15, 2005 of $100 million 9.3 per cent bonds due 2012 and $41.5 million 7.1 per cent bonds due 2014. "The negotiations meant that Grenada is not anymore not paying its debt," said Hessel. "It negotiated and restructured its old debt. B-minus is not a very high rating but it indicates a move forward. It indicates that sovereign governments are getting out of default and when this happens we assign a rating of B-minus but it indicates that a government is repaying its debt. What we are saying is that there will not be any problems with the repayment of debt within a year or something like that." Hessel told the Carib News that the government of Dr. Keith Mitchell, the Prime Minister, seemed committed to "prudent fiscal management" and the country was on a road to "expected economic recovery " beginning next year. "Real gross domestic product growth is forecast to average above 4 per cent over the medium term, reflecting an ongoing construction boom and gradual improvement in tourism and agriculture," Hessel said. "The government plans to cut both fiscal imbalances and the heavy debt burden, despite possible political pressures from the opposition and the labor unions." Hessel and S&P seemingly were quick to urge the government to keep on its stated path while at the same time resisting political and union pressure to do otherwise. "If, due to political pressures, the fiscal adjustment is not achieved or donors' support falls short of expectations, the government's creditworthiness may be negatively affected," was the she put it. The bottom line as S&P sees it is that "the successfully completed debt restructuring, combined with ongoing strong donors' support and necessary fiscal adjustment, will alleviate fiscal pressures and stabilize and eventually reduce the government debt burden." That was why a change of course would be harmful to the country. Reprinted from caribworldradio.com