The Bahamas saw some of its dollar bonds trade weaker on Wednesday with its 7.125% 2038s leading the fall, dropping ~7.5 points to 86.9 before recovering slightly this morning to 89.4 yielding 8.32%. While the reason for the sell-off is not clear, it comes after noted Caribbean economist Marla Dukharan predicted that Bahamas’ next crisis will be a balance of payments crisis and that the commonwealth will find it especially hard to refinance debt after the recent Moody’s downgrade on September 17 to Ba3 from Ba2. Dukharan said that Bahamas could default on its debt and believes that it could soon be part of a fiscal program through the IMF.

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