Cook Islands gets downgrade

Credit ratings agency Standard and Poor's has revised its outlook on the Cook Islands from stable to negative, but affirmed its 'BB/B' foreign currency and local currency credit ratings.

S&P said that Cook Islands' government net debt was likely to rise from 3 per cent of GDP in 2008 to around 28 per cent in the next three years, but that this rise would only be temporary.

BB is categorised as sub investment grade or junk.

It noted that the government's budget position was vulnerable to further weakening in the tourism sector, and said borrowings to help fund the South Pacific Mini Games may also pose a threat to the government's position.

- INTEREST.CO.NZ