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As Puerto Rico moves on, USVI crisis arises

- territory shelved a $219 million bond issue last, according to Bloomberg
December 23rd, 2016 | Tags: lifeline US Virgin Islands Bloomberg bonds high yields
St Thomas, US Virgin Islands seen from the sky. According to Bloomberg, the US Virgin Islands economy appears in need of a lifeline. Photo: Internet Source
CHARLOTTE AMALIE, St Thomas, USVI- The US Virgin Islands economy seems to be in dire straits, according to a report by Bloomberg, saying that just as a federal control board moves to steady the ship in Puerto Rico, another US territory appears in need of a lifeline, too.

According to the article published on December 21, 2016, the US Virgin Islands (USVI) is grappling with some of the same forces that pushed its closest American neighbor into a cascading series of defaults. It said the island’s bonds were cut to junk by S&P Global Ratings, which is mulling another downgrade over the growing fiscal distress in the region. Meanwhile, Puerto Rico is moving closer to restructuring its $70 billion debt after the US board overseeing its finances issued a framework to pull the commonwealth out of crisis and resumed talks with creditors.

More debt per person; difficult to borrow

With interest rates edging higher, according to Bloomberg, the Virgin Islands --- which has more debt per person than Puerto Rico -- is finding it more difficult to borrow.

“The territory shelved a $219 million bond issue last week amid a spike in yields triggered by the post-election selloff in credit markets. That prompted S&P to place its debt on a negative watch for up to 90 days, warning that the government may find it difficult to meet its debt obligations if it struggles to access credit markets.”

The two Caribbean territories are facing similar fiscal issues: shrinking populations, cash-strapped pensions, histories of borrowing to paper over budget shortfalls and unemployment rates that are twice as high as in the U.S. mainland. While Virgin Islands opposed the federal rescue law that installed a seven-member control panel to fix Puerto Rico’s finances, it may serve as a road map for the territory if it hits a fiscal cliff, S&P analyst John Sugden said.

"Before they get to that point, you’d have to see some of the issues that Puerto Rico’s on, in terms of not paying the debt or getting closer to that,” Sugden said.

9 Responses to “As Puerto Rico moves on, USVI crisis arises”

  • bvi (23/12/2016, 12:09) Like (18) Dislike (12) Reply
    WE NEXT
  • inquiring mind (23/12/2016, 17:06) Like (10) Dislike (9) Reply
    @ BVI2 what the hell are you rebuking???? the BVI is already there!!! so scatter with your Jesus crap
  • Struppz (25/12/2016, 08:25) Like (1) Dislike (1) Reply
    with the negative and the back biting!! of course the BVI will get there??! ya'll already speaking it in to Existence!!!! the tongue is a powerful thing......
  • Tsk (25/12/2016, 08:26) Like (2) Dislike (0) Reply
    ya'll next not me!!! keep your dark clouds over there!!
  • Concerned (25/12/2016, 08:59) Like (0) Dislike (0) Reply

    Yes, BVI next. U.K. will come in and take over. When they do, me tinks audited statements from past will put him in jail!!

  • zip (27/12/2016, 20:42) Like (0) Dislike (0) Reply
    You know,St. Thomas has been going through a series of events which lead to what it is now.


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