trending Market Intelligence /marketintelligence/en/news-insights/trending/8UITP3KqvCtkqc8aCvhxsw2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us
In This List

S&P places El Salvador ratings on CreditWatch negative

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery

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.