Negative Outlook for Nicaragua's Debt

S & P has downgraded from stable to negative the rating outlook due to lower growth and weaker fiscal expectations in light of political turbulence.

Monday, June 11, 2018

From the summary of the S & P Global Ratings report:

June 8, 2018.
- Public protests and political disagreements have disrupted Nicaragua's economy and created political uncertainty. 
- The difficult political environment will affect economic and fiscal performance in 2018, and potentially next year.  
- Therefore, we have revised the outlook to negative from stable and confirmed Nicaragua's sovereign ratings of 'B +' and 'B'.
- The negative outlook reflects the risk that prolonged political paralysis will worsen Nicaragua's governability and deteriorate public finances and growth expectations, leading to a downgrade. 

See full statement (in Spanish).

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Nicaragua's Debt Rating Downgraded

July 2018

S & P has downgraded the debt rating from B + to B, arguing that the escalation of the internal conflict has weakened governance, and the rating could be reduced again in the next 12 months if the violence continues to rise.

From a press release by Standard & Poor´s:

Effects of the Political Crisis on the Economy

October 2017

Standard & Poor's has reduced Guatemala's debt rating from BB to BB-, arguing that political instability and weakness in government institutions are affecting economic growth prospects.

A series of events that began earlier this year, when President Jimmy Morales declared the Commissioner of the International Commission against Impunity in Guatemala, Iván Velasquez a persona non grata, and which continued with the "Corruption Pact" made by 107 deputies to approve a reform of the Penal Code to favor politicians implicated in illicit financing and to extend commutative penalties is the main reason behind the reduction in the debt rating.

El Salvador's Debt Rating Downgraded Again

February 2017

In line with recent warnings issued by other credit rating agencies regarding the country's bleak fiscal outlook, Fitch has reduced the debt rating from B + to B, and changed the outlook to negative.

From a press release issued by Fitch Ratings:

Fitch Ratings-New York-01 February 2017: Fitch Ratings has downgraded El Salvador's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B' from 'B+'.

Guatemala As Seen by Standard & Poor's in November 2015

November 2015

Despite the fact the government has acknowledged that it does not have sufficient resources to pay interest on foreign debt, the agency announced that the country´s risk rating remains unchanged, with a stable outlook.

From a press release issued by Standard & Poor's:

In our view, political instability related to corruption cases will not significantly hurt Guatemala's stable macroeconomic performance this year and in 2016.

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