trending Market Intelligence /marketintelligence/en/news-insights/trending/8UITP3KqvCtkqc8aCvhxsw2 content esgSubNav
In This List

S&P places El Salvador ratings on CreditWatch negative


Insight Weekly: Job growth faces hurdles; shale firms sit on cash pile; Africa's lithium future


Street Talk | Episode 99 - Higher rates punish bond portfolios, weigh on bank M&A


Insight Weekly: Loan growth picks up; US-China PE deals fall; France faces winter energy crunch


Insight Weekly: CEO pay jumps; yield curve inversion deepens; wind giants lift turbine prices

S&P places El Salvador ratings on CreditWatch negative

S&PGlobal Ratings on Oct. 6 placed its B+ long-term and B short-term foreign andlocal currency sovereign credit ratings on El Salvador on CreditWatch withnegative implications.

The sovereign'stransfer and convertibility assessment of AAA is unchanged.

S&Psaid that the negative CreditWatch placement reflects the country'sdeteriorating financial management, reflected in a weakening of thegovernment's ability to gain access to liquidity, due to heightened politicalpolarization. A political stalemate between the ruling Frente Farabundo Martípara la Liberación Nacional party and the main opposition Alianza RepublicanaNacionalista is also leading to rising economic costs, among other factors,S&P added.

The ratingagency noted that El Salvadoran President Sanchez Ceren's administration hasbeen unable to acquire congressional approval for external debt issuance plans,and as a result the country has accumulated about $1 billion in short-termlocal debt. And while BancoCentral de Reserva de El Salvador can repay maturing obligationswith new debt through a trust, S&P noted that the move only providestemporary relief.

The ratingagency said that it expects to resolve the CreditWatch by year-end, based onthe outcome of political negotiations on fiscal policy and a proposed newfiscal discipline law.

S&P Global Ratings and S&P GlobalMarket Intelligence are owned by S&P Global Inc.