S&P Reaffirms Trinidad & Tobago’s Investment Grade

July 25, 2026

Dave Dookie, Managing Director

• S&P reaffirmed Trinidad and Tobago's BBB- investment-grade sovereign rating. Highlighted were strong external assets, the Heritage and Stabilization Fund, and projected current account surpluses averaging 5.2% of GDP. However, the negative outlook reflects continued reliance on the energy sector and the need for stronger long-term economic growth.

• Global equity markets were mixed. The U.S. underperforming as higher Treasury yields, new U.S. tariffs and concerns over AI spending pushed the Nasdaq down 2.13% and the S&P 500 down 0.60%. Europe outperformed, led by gains in Germany, France and the UK, while Asian markets were mixed.

• Energy markets remained resilient. Brent crude trading near US$97 per barrel, supporting energy-related equities despite rising geopolitical tensions and uncertainty surrounding global trade policy.

• The Trinidad and Tobago Stock Exchange weakened. The Composite Index fell 0.97% amid significantly lower trading activity. GraceKennedy and Prestige Holdings were among the week's strongest performers, while One Caribbean Media and NCB Financial recorded the largest declines. Banking system excess liquidity increased to approximately TT$2.77 billion.

• Caribbean sovereign bonds remained stable despite higher U.S. Treasury yields. Trinidad and Tobago's 2030 sovereign bond yielded approximately 5.51%, compared with 5.68% to 6.14% for Jamaica's longer-dated bonds, 5.15% to 6.61% for Barbados, and approximately 4.7% to 7.0% across Dominican Republic maturities, reflecting continued investor confidence in regional credit fundamentals.

S&P Global Ratings reaffirmed Trinidad and Tobago’s BBB- investment-grade sovereign rating, recognizing the country’s favorable external position, strong creditor profile and substantial national assets, particularly the Heritage and Stabilization Fund. S&P expects current-account surpluses to average approximately 5.2% of GDP between 2026 and 2029, while public-sector liquid assets, including the HSF, are projected to average close to 32% of GDP. These buffers remain important protections against energy-price volatility, external shocks and periods of weaker fiscal revenue, while supporting the

Government’s ability to service its financial obligations.

The reaffirmation is positive for investor confidence, but the retained negative outlook shows that material challenges remain. S&P highlighted weak historical growth, declining fiscal and external buffers, limited economic diversification and continued dependence on energy revenue. The rating agency nevertheless identified a credible route back to stronger growth, with new domestic gas production expected from 2027 and possible access to Venezuelan gas offering additional upside for LNG production, government revenue and downstream activity. Improvement in the outlook will therefore depend on stronger fiscal performance, preserving external reserves and converting energy opportunities into sustained economic growth and diversification.

U.S. equity markets declined over the last five trading days as higher Treasury yields, new tariffs and renewed concerns about artificial-intelligence spending weighed on sentiment. The S&P 500 Total Return Index fell 0.60%, the Dow declined 0.38%, and the Nasdaq Composite lost 2.13%. Technology stocks led the weakness, with Meta down 7.87% and Alphabet falling 7.79%, while investors questioned whether rising AI capital expenditure would translate quickly enough into earnings. In contrast, energy and financial shares performed more strongly, including ExxonMobil, Chevron and JPMorgan, as oil prices and interest rates remained elevated. U.S. Treasury yields approached their highest levels of the year, with the 10-year near 4.68% and the 30-year around 5.16%.

The United Kingdom outperformed, with the FTSE 100 rising 1.28%, supported by its relatively high exposure to energy, banking and defensive stocks as Brent crude traded near US$97 per barrel. European markets also posted modest gains, with the Euro Stoxx 50 up 0.80%, Germany’s DAX up 1.08% and France’s CAC 40 up 0.40%. Stronger energy shares and selective buying in financials helped offset concerns over trade tariffs and elevated global interest rates.

Asian markets were mixed. Japan’s Nikkei 225 declined 3.33%, reflecting weakness in exporters and technology companies, while Australia’s ASX 200 slipped 0.28%. In contrast, Hong Kong’s Hang Seng gained 1.63% and China’s Shanghai Composite rose 1.33%, supported by renewed buying in selected large-cap companies and expectations of continued policy support from Beijing.

The Trinidad and Tobago equity market weakened during the week, with the Composite Index down 0.97%, the All T&T Index down 0.49% and the Cross Listed Index down 2.38%. Trading activity fell sharply, as First Tier volume declined 75.71% to about 360,000 shares and value traded dropped to TT$4.36 million. Among the top performers, GraceKennedy rose 5.68%, Prestige Holdings gained 2.54% and West Indian Tobacco advanced 1.93%. One Caribbean Media fell 13.91%, while NCB Financial declined 9.85%. Domestic banking system excess liquidity increased to approximately TT$2.77 billion, although overall market liquidity remained limited.

Caribbean USD sovereign bonds remained relatively stable despite higher Treasury yields. Trinidad and Tobago’s 2030 bond offered approximately 5.51%, while the 2034, 2036 and new 2038 maturities yielded about 6.13%, 6.30% and 6.42%, respectively. These levels reflect the country’s investment-grade status, although the negative outlook and weaker external reserves may keep spreads sensitive to fiscal developments. Jamaica’s 2036 to 2045 bonds yielded roughly 5.88% to 6.14%, supported by continued fiscal discipline. Barbados’ 2029 and 2035 bonds offered approximately 5.15% and 6.61%, while Dominican Republic sovereign yields ranged from about 4.71% on short maturities to approximately 7.02% at the long end. Overall, Trinidad remains a comparatively defensive regional credit, while Jamaica, Barbados and the Dominican Republic offer higher carry across selected maturities.

About the author: Dave Dookie is the Managing Director of Waterloo Capital Advisors Limited, a Trinidad and Tobago based financial advisory firm specializing in investment management, capital markets and structured finance. He has advised governments, financial institutions, and energy companies on debt issuance, project financing, and strategic capital raising across the Caribbean. He holds degrees and advanced qualifications from the London School of Economics and Political Science (LSE) and the University of London and has completed advanced training in data science through the MIT Applied Data Science Program.

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