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S&P’s downgrade comes amid what it describes as Jamaica’s vulnerable fiscal profile, combined with difficult financing conditions and the possibility of a “distressed debt exchange.”

However in a statement August 5, 2009, Finance Minister Audley Shaw  said S&P ignored  several positive economic developments that have taken place recently and emphasized that Jamaica does not intend to pursue any “distressed debt exchange” – a euphemism for debt forgiveness.

Shaw said the positive economic developments included significant over-subscription of locally-issued debt; sharp reductions in market-determined interest rates and tightening of the spreads of Jamaican Government-issued foreign currency denominated debt traded on the international capital markets.

In the meantime, the Jamaica Securities Dealers Association described S&P’s downgrade as “premature and unwarranted given recent developments that are slated to improve and not worsen sovereign risk.

The Jamaica Securities Dealers Association is a grouping of licensed private sector companies and individuals that deal in securities trading.

Some critics argue that international credit ratings agencies played a major role in the sub-prime mortgage crisis in the United States that triggered the international financial meltdown.

They says rating agencies such as Fitch, S&P and Moodys were active participants in the structuring of  the toxic mortgage-based instruments that fed the global financial crisis and from which they profited handsomely.