Moody’s Investors Service has affirmed American Samoa’s bond rating of Ba3.
In addition, it affirmed the Ba3 rating on American Samoa’s outstanding general revenue bonds valued at $129.5 million at the end of Fiscal Year 2022.
In a June 30 statement, Moody’s gave the territory a stable outlook.
The Ba3 issuer rating reflects American Samoa’s status as a US territory that receives generous operating and capital assistance from the federal government, which has enabled the government to maintain a solid financial position.
The rating also factors in the territory’s small and volatile economy with employment concentrated in government and tuna packing; very low resident income levels; above-average long-term liabilities and risks associated with operating a government-owned charter bank.
It also reflects significant exposure to physical climate risks, namely sea level rise.
Moody’s said American Samoa’s Ba3 general revenue bond rating is the same as the territory’s issuer rating given the government’s pledge of its full faith and credit, and broad revenue base to repay the bonds.
With regards to the rating outlook, Moody’s said the stable outlook reflects the territory’s solid financial position and significant federal government support, which will enable the territory to weather economic swings that may occur in the next two years.
Listed as factors that could lead to a down grade of the rating:
- Weakening of financial position
- Economic deterioration
- Reduction of US federal government support
- Significant increase of debt and pension liabilities.
As we’ve reported, ASG has failed to meet a deadline to submit its financial audit for Fiscal Year 2022 due to the Territorial bank of American Samoa’s failure to complete and submit its audit for that fiscal year. One possible consequence of this is a reduction of American Samoa’s credit rating.
