HAGÅTÑA (The Guam Daily Post) — The island’s financial outlook has improved, according to S&P Global Ratings.
A release from the governor’s office announced that the agency, which provides ratings for the government of Guam’s municipal bonds, upgraded its outlook from negative to stable, following an in-person trip Gov. Lou Leon Guerrero and her fiscal team paid to S&P last month.
While Leon Guerrero told reporters she expected the upgrade upon her return home, she also was optimistic the meeting would yield an investment grade bond rating.
The governor’s office said S&P graded Guam’s general debt with a “BB-,” which is one level under the lowest tier of investment grade ratings.
“While it is reassuring that our ratings went from negative to stable across all areas, we had hoped for a ratings upgrade and pressed hard to achieve as much,” Leon Guerrero said. “Our fiscal team gave great effort to convince S&P of our stability and resilience, and we remain confident that our work is deserving of a ratings upgrade. This will not deter us from continuing to focus on fiscal discipline and responsibility as we support the revitalization of our economy.”
The stable outlook, according to the governor’s office, reflects S&P’s view of recent efforts to stabilize GovGuam’s finances, and is supported by an influx of federal funds.
“GovGuam’s small and concentrated economy, which is heavily reliant on tourism, continues to face headwinds as a result of the Covid-19 pandemic and anemic recovery of its tourism sector. However, Guam has shown relative stability in its finances with structural balances reported for fiscal 2020 and estimated for fiscal 2021. Furthermore, the general fund’s improved total cash balance supports current credit stability,” the governor’s office stated.
The Governor’s Complex as seen Sunday Sept. 12, in Adelup, Guam. The territorial government’s financial outlook was upgraded from negative to stable by S&P, according to an announcement from the governor’s office.
