CABEI signed a memorandum of understanding with other Central American organizations to strengthen the development of the regional public debt market.
The agreement was signed by the Central American Bank for Economic Integration (CABEI), the Executive Secretariat of the Council of Finance Ministers of Central America, Panama and the Dominican Republic (SECOSEFIN), the Executive Secretariat of the Central American Monetary Council (SECMA) and the Association of Central American Stock Exchanges (BOLCEN).
Arguing that economic strength has weakened as a result of social tensions and is likely to leave a lasting negative impact, the rating agency reduced the country's credit risk rating from B2 to B3.
"The risk of reduced access to official external credit is creating financing challenges and restricting the authorities' ability to support economic activity," the agency's report explains.
As of August 2019, the balance of the country's public external debt reached $6,116 million, 3% higher than the amount reported at the close of 2018.
Between December 2018 and August 2019, the ratio of debt to GDP also increased, from 45.4% to 49.3%, according to the most recent report by the Nicaraguan Foundation for Economic and Social Development (Funides).
Standard & Poor's warned that if in the coming months the political environment worsens or access to local and external financing deteriorates again, the debt note could suffer further deterioration.
Standard & Poor's has given a B+ rating to the $1.5 billion debt issue that Costa Rica expects to place in the international market in November.
"Global Ratings today assigned a "B+" rating to the prospective reopening of Costa Rica's notes which have a 7.158% rate maturing in 2045 and a "B+" rating in its planned issuance of notes maturing in 2031, the latter issue still does not have a defined trading rate," the rating agency said on November 8.
At the eighth month of the year, the balance of the country's public external debt totaled $6,116 million, 3% higher than that reported at the end of 2018.
Of the total public external debt, 70% corresponds to debt with multilateral creditors and 29% to bilateral creditors, reported the Central Bank of Nicaragua on September 27.
Although the goal for this year was to issue $100 million in debt bonds, during the first quarter the Nicaraguan government only awarded $1.1 million, doubting the level of investor confidence.
According to the "Public Debt Report, First Quarter 2019", prepared by the Central Bank of Nicaragua, from January to March regarding Investment Securities in dollars, 1.03 million was issued at an average rate of 5.31% and an average term of 7 months.
At the end of June 2019, Nicaragua's public external debt reached $6.057 million, an increase of $107 million over December 2018.
From the Central Bank of Nicaragua statement:
According to official statistics, the balance of public external debt up to June 30, 2019 was of 6,057.0 million dollars, which represented a 46.0-million-dollar increase regarding the balance registered in the previous month (US$6,011.0 million).
At the end of the fourth month of 2019, the public external debt reached $6,018 million, which represents a $68 million increase with respect to what was reported in December 2018.
From the Central Bank of Nicaragua report:
According to these statistics, the balance of the public external debt was 6,017.7 million dollars to April 30, 2019, which represented a net increase of 30.1 million dollars regarding the balance registered in the previous month (US$5,987.6 million) and of 68.1 million dollars regarding December 2018 (US$5,949.6 million).
The latest risk ratings for the issuance of long-term debt of Central American economies identify Panama as the most attractive country to invest in.
On March 8, Moody's decided to raise its long-term issuer rating in foreign currency from Baa2 to Baa1, arguing that the outlook remains more favorable in the medium term.
At the end of the first month of 2019, public external debt reached $5.966 million, 7% more than that reported in January 2017, a rise explained by loans granted by multilateral agencies.
The report of the Central Bank of Nicaragua (BCN) "... According to these statistics, public external debt totaled US$5,966.6 million, representing a net increase of US$17.0 million over the previous month.
"The tightening of global financing conditions is a concern for Central American countries with large current account deficits or those highly dependent on capital flows."
According to the report "World Economic Outlook - January 2019" compiled by the World Bank (WB), countries with a high external debt burden would be at risk if a sudden change in investor confidence in emerging market and developing economies were to occur.
Arguing that the country's fiscal and financial profiles have weakened, Standard & Poor´s downgraded from B to B- the negative outlook for Nicaragua's foreign currency debt.
The negative outlook reflects a greater than one of every three probabilities of a downgrade in the next 12 months because of possible additional pressure on the balance of payments or the domestic financial system in dollar terms, given the government's limited foreign exchange financing options.
At the end of the third quarter of 2018, Nicaragua's public external debt totaled $5.771 million, 4% more than that reported at the end of 2017.
The Central Bank of Nicaragua (BCN) reported that public external debt totaled US$5,771.3 million, representing a net increase of US$49.5 million over the previous month.
From this total, US$3,987.4 million correspond to debt with multilateral creditors (69.1%), US$1,743.2 million with bilateral creditors (30.2%) and US$40.7 million with private creditors (0.7%), the institution reported.
The Nicaraguan government authorized the Finance and Public Credit Ministry to issue $279.7 million in debt securities to cover the budget deficit.
The presidential agreement details that "In order to comply with the provisions of Article 6 of Law 978; Amendment Law to Law 966, Annual Law of the General Budget of the Republic 2018, increasing internal financing through greater issuance of bonds of the Republic of Nicaragua for a total of C$9, 035,600,000."