…….. because
MOODY’S TOO MOODY
The Rum Posse had their usual end of the week lime last weekend by Alfred who is Tobagonian by birth and loud and proud about it. Whenever he is hosting, one is guaranteed to have a full Tobago spread and this time was no exception. There was cornmeal coo coo, callaloo, macaroni pie, curry goat, curry crab and dumplings, and salt fish buljol.
As if that were not enough, he threw in a pot of hot and spicy sancoche, too, as he said,to liven the taste buds up a bit. There was the usual array of drinks as well as a few bottles of pacro water, a drink which Tobagonians swear by. They believe with all their hearts that the pacro, a type of mollusk, has aphrodisiac qualities similar to that of bois bande and oysters. For dessert there was dasheen punch; cassava pone; and some chocolate tea.
The full Posse membership was present: Big Bottom Beverly and her younger sister, Shirley; Anand and his wife, Rihanna; Barman; Balkie; Ramesh; Roshan; and Sunil.
There were many important issues from which to choose – the disappearance of the two-year-old toddler, Angelo Tobias-Plaza, from his home in Cambridge Trace, Goodwood, Tobago, which has gotten THA Chief Secretary Farley Augustine “damn vex” over the “Nancy stories” being “peddled”. It was reported in the media that one of the suspects confessed that he had strangled little Angelo and had dumped the body in the sea. The whole nation recoiled in horror over the dastardly event and is awaiting further developments.
Government’s credibility is eroding, according to former Minister of Trade & Industry, Vasant Bharath; staff shortage is rampant in the DPP’s office; and UK Prime Minister Sir Keir Starmer faces a challenger, Wes Streeting, for the leadership of the Labour Party. However, apart from little Angelo’s fate and whose body is yet to be found, none of the other issues met the threshold of importance for discussion by the Posse members. They therefore decided to talk about the National Gas Company (NGC) Board’s decision to cancel its international rating contract with Moody’s.
A rating is Moody’s opinion of the credit quality of individual obligations or of an issuer’s general creditworthiness. A rating is not recommendations to buy or sell, nor a guarantee that default will not occur. Investors use ratings to help price the credit risk of fixed-income securities they may buy or sell. Many also use ratings as limits on their investment parameters and as a means for expanding their investment horizons to markets or security types they do not cover by their own analysis.
Because major investors globally rely on Moody’s ratings, the ratings help to provide issuers of debt with stable, flexible access to those sources of capital. Moody’s rates any type of debt or related obligation of interest to institutional investors, e.g., bonds, debentures, asset-backed and mortgage-backed securities, convertible bonds, medium-term notes, derivative securities.
Moody’s credit ratings represent a rank-ordering of creditworthiness, or expected loss. Expected loss is a function of the probability of default and the expected severity of loss given a default. Ratings are forward looking in that the rank ordering is designed to hold across multiple horizons.
There are three top credit rating agencies in the world: S&P Global Ratings. They evaluate credit risk for governments, companies, banks, and financial products. They also provide research and market intelligence used by investors and institutions.
Moody’s Ratings/Moody’s Analytics measures creditworthiness, financial risk, economic risk, and market conditions. Moody’s also offers data, analytics, and research tools for institutions trying to understand risk; and lastly, Fitch Ratings. They provide credit ratings, research, and commentary for global capital markets. They evaluate risk for sovereign countries, corporations, banks, insurance companies and structured finance products.
Alfred: Welcome one and all to de only ‘Gonian in the Posse. Everything go be nice so, make allyuhself comfortable and leh we start we lavway.
Big Bottom Beverly: Aye, Aye, not so fast Alfie. Yuh know how we does do it. Allow me to formally thank yuh for having us as your guests dis evening. On behalf of the entire gang, thanks for having us and we are also happy to be here. So, what is all dis talk about Moody’s? I only know what I read in de ‘papers and ah read plenty about Moody dese past few days.
Shirley: Me too, sis. Last week had ah article in de Express where Moody said that it had withdrawn all credit ratings for NGC because NGC had stopped taking part in Moody’s rating process, which ended a long-standing relationship that existed.
Roshan: What NGC had to say ’bout dat?
Shirley: NGC say it had withdrawn from Moody’s Ba2 corporate family rating, Ba2 baseline credit assessment and Ba2 senior unsecured notes rating. NGC also noted that its outlook before the withdrawal had been negative. Moody’s then said that, and I quote, “We have decided to withdraw the rating(s) because of inadequate information to monitor the rating(s) due to the issuer’s decision to cease participation in the rating process”.
Ramesh: But that eh telling me a thing. Why should NGC withdraw from a powerful international rating agency as Moody’s.
Anand: Ram, I guess you eh read what former UNC Minister of Trade and Industry Vasant Bharath had to say on de matter.
Alfred: What he say?
Anand: Bharath criticised the NGC’s decision to discontinue its relationship with Moody’s. He described the move as an attempt to avoid scrutiny after Moody’s gave NGC an unfavourable assessment. He said that NGC does not seem to want any independent oversight and now that it has left Moody, they will likely engage in “ratings shopping”, seeking out agencies that are more likely to put them in ah good light.
Rihanna: But if NGC really do that, from where I stand, that will put them in a bad light; and people and big business could lose confidence in them.
Roshan: Yes, Rihanna, yuh right. But yuh think any ah dem big pappies care bout dat? I read an article by Mariano Browne de other day and quite frankly, I eh understand one word he say on de matter. He remind me a little bit of de late Lloyd Best, who after he talk you had to look up in a dictionary to understand what he say.
Sunil: Rosh, yuh did not read what de Chairman of de National Gas Company, Gerald Ramdeed had to say bout Bharath criticism on de matter? Man, Ramdeen well cuss-up Bharath.
Barman: And???
Sunil: Ramdeen say Bharath suffering from “intellectual paralysis” when he suggested that only Moody’s can provide a credible credit rating for NGC. He say Bharath is ah “self-proclaimed financial and capital markets specialist” and that moving away from Moody’s does not mean moving away from objective scrutiny.
Anand: What yuh say is true, Sunil. Ramdeen pointed out that in the global rating environment, the three major international rating agencies are S&P Global, Moody’s, and Fitch; and that while NGC disengage Moody’s, they engaged the other two. He continued that to make matters even better, S&P is the largest rating agency in de world. So Ramdeen wanted to know what was Bharath problem.
Alfred: All this international rating and thing is really above my pay grade. As far as I concern, Ramdeen get rid ah Moody’s because he find dem too moody. What allyuh need to do now is rate my good, good, Tobago-style food and be in a good mood when allyuh doing so.
Until next week
