Bear Stearns lowered the bond rating for the Dominican Republic because of doubts as to whether payment deadlines can be met when they fall due later this month. According to the report in El Caribe, the fact that the country has not managed to renew the IMF agreements has made the local situation worse, and this is what pushed Bear Stearns to lower its ratings. The monthly report for Central America and the Caribbean points out that there are two other regional nations with problems, Belize and Costa Rica. It says the most important event during the month will be the 23 July due date for the DR’s US$27-million payment on the 2013 bonds. Bear Stearns sees this amount of money “as a large amount within the context of the actual local situation.” The risk analyst acknowledges that the government has said it will pay, but Bear Stearns thinks “that once again they will use the grace period, and that it will be the decision of the President-elect Leonel Fernandez to honor the payment or not.” The report speaks of the urgent necessities and the daunting challenges facing the country: extensive tax reform, resolution of the quasi-fiscal deficit, the much hoped-for solution to the energy crisis, a renewal of the IMF accords, and the fulfillment of the conditions set out by the Paris Club. Because of the doubts raised by these challenges, Bear Stearns has lowered the DR’s bond rating to “low performance.” The company also mentions the unpredictability and instability of the current situation as prime movers for the new, lower assessment, from B3 to CC- .