Turks and Caicos gets 1st credit rating as territory seeks to pay down British-backed debt

The Turks and Caicos Islands received its first sovereign credit rating Tuesday in what officials portrayed as a milestone for a British territory that only recently emerged from direct rule imposed amid a corruption scandal.

Credit ratings agency Standard & Poor's assigned a rating of "BBB+" and said the outlook is stable for the small chain of islands southeast of the Bahamas that is best known as a high-end tourism destination.

S&P said in a report that the gross domestic product is expected to grow an average of 3 percent over the next three years, citing the effects of several tourism projects in the islands that have a population of about 32,000.

Finance Minister Washington Misick said tourist arrivals increased 41 percent in the winter season of 2013-14 compared to a year earlier, in part due to the harsh winter in the northeastern United States.

The government has a net debt of about $121 million, which it hopes to reduce to about $85 million when a British loan guarantee expires in February 2016, Misick said. The finance minister said that the territory has no plans to increase its debt but that the sovereign credit rating will make it easier and cheaper to borrow in the future.

"It's a huge step," he said from Providenciales, the most populated island in the chain. "It gives us an opportunity to compare ourselves with the rest of the Caribbean and the rest of the world and offers us an opportunity to improve on our economic development."

Britain took control of the Turks and Caicos for three years starting in 2009 after an inquiry brought allegations of systemic corruption by former Premier Michael Misick and others in his government. The former premier has denied wrongdoing and is awaiting trial.