Moody's Outlook Upgrade and Rating affirmation
Moody's Ratings changed the sovereign outlook for Trinidad & Tobago from negative to stable on 13‑June‑2026 and affirmed the Ba2 long‑term local‑currency and foreign‑currency issuer and senior unsecured ratings. The outlook shift reflects improved near‑term external prospects driven by higher projected oil and gas prices and a more favourable external maturity profile after a Eurobond issuance in January 2026. The government issued a $1 billion Eurobond, which enabled the partial redemption of approximately $600 million of the $1 billion bond maturing in August 2026, thereby smoothing the external repayment schedule.
Moody's expects the higher oil and gas price outlook to boost export receipts, supporting the de‑facto peg to the US dollar and reducing the need for foreign‑exchange reserve sales. The agency projects foreign‑exchange reserves to remain between $3.5 billion and $4 billion, a level deemed adequate for external debt‑service and import coverage amid structural balance‑of‑payments pressures that are expected to persist until new gas projects become operational toward the end of 2027.
While Trinidad & Tobago faces a secular decline in energy output that constrains trend growth, revenue capacity and external accounts, Moody's notes that these pressures are partially offset by high income levels, political stability and moderate policy‑adjustment capacity. Fiscal risks arising from a high debt burden are mitigated by sizable financial buffers, notably the Heritage and Stabilisation Fund, which provides a fiscal financing back‑stop.
Moody's forecasts a meaningful boost to oil and gas production from late‑2027 following final investment decisions on several large upstream projects. New natural‑gas fields – Manatee, Ginger and Aphrodite – are expected to lift gas output from the current 2.5 billion cubic feet per day (bcfd) to roughly 3.0‑3.5 bcfd. The agency also projects the adjusted general‑government debt‑to‑GDP ratio to peak at about 85 % in fiscal 2026 before declining thereafter.
Local‑currency and foreign‑currency country ceilings remain unchanged at Baa2 and Ba1, respectively. The three‑notch gap between the local‑currency ceiling (Baa2) and the sovereign rating reflects the economy’s significant exposure to the hydrocarbon sector, with spill‑over effects to non‑energy activity, balanced by moderate exposure to domestic and geopolitical risk.