The rating agency affirmed the Central American Country’s Long-Term Foreign Currency Issuer Default rating at "B-" and reviewed the rating outlook to stable from negative.
Nicaragua's ratings are constrained by the lowest average World Bank Governance Indicators score in the Americas rated by Fitch, low per capita income, political stability risks, and international sanctions that limit future external financing, the rating agency's analysis highlights.
Arguing that the pandemic has had a negative effect on the local economy and Panamanian public finances, Fitch Ratings downgraded the country's sovereign rating from BBB to BBB-.
Regarding forecasts for 2021, the rating agency expects Panama to experience an economic recovery with a real growth of 9.2%, driven by the economic opening, public investment projects such as the construction of Metro Line 3, exports from the copper mine, and the recovery of domestic consumption. This growth trend is expected to be maintained by 2022, informed the Ministry of Economy and Finance of Panama (MEF).
Based on the argument that there is no significant fiscal consolidation and sustained economic recovery, the rating agency decided to downgrade the government's long-term issuer rating perspective from stable to negative.
Although the outlook was modified, Moody's decided to maintain the long-term issuer and senior unsecured debt ratings at Baa1.
Standard & Poor's downgraded the foreign debt rating from B+ to B with a negative outlook, arguing that there is uncertainty due to the lack of flexibility of the Alvarado administration in implementing fiscal policy in the country.
The negative perspective in the new risk note, anticipates that there is a possibility that in the next 12 months the rating will be degraded again, if the authorities adopt policies that damage the country's financial profile.
The rating agency decided to keep the long-term issuer's note at B2, but changed the risk outlook from stable to negative, arguing that there are greater risks to the country's financing due to increased borrowing requirements.
The affirmation of Costa Rica's B2 rating takes into account the sovereign's levels of wealth above its peers and its dynamic economy.
According to Fitch Ratings, banks in Nicaragua will continue to be pressured by the remaining effects of an economic contraction for the second consecutive year, a situation derived from the political crisis affecting the country.
Arguing that continuity in economic policies is expected after the change of administration in January 2020, Standard & Poor's maintained the country's credit risk rating at BB-.
From S&P report:
S&P Global Ratings confirmed its long-term sovereign credit ratings of "BB-" in long-term foreign currency and "BB" in Guatemala. The outlook for our long-term ratings remains stable.
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.
As a response to Giammattei's triumph, the rating agency maintained Guatemala's debt rating at BB with a negative outlook, warning of the difficulties the new president will face in governing without a legislative majority.
The triumph of the candidate of the VAMOS party did not surprise the analysts of the rating agency Fitch Ratings, for whom the political and fiscal scenario of the coming months will be the same as it has been seen so far.
After the country issued $1.097 million in Eurobonds for a 30-year term, Moody's gave them a "B3" rating, while Fitch Ratings assigned them a "B".
Fitch Ratings has assigned a 'B-' rating to El Salvador's $1.097 million notes due January 2050. The notes have a coupon of 7.1246%, the agency said.
The Fitch statement dated July 31 adds that "... The proceeds from the issue will be used in accordance with local laws for general budgetary purposes, including the redemption of bonds maturing this year. The rating of the bonds is aligned with El Salvador's long-term foreign currency issuer default rating (IDR) of 'B-' with a stable outlook."
Standard & Poor's explained that continuity in economic and investment policy next year, and overall political stability, support the decision to keep the rating at BB- with a stable outlook.
We could raise the ratings next year if a faster and more effective implementation of the expected energy reform strengthens Honduras' economic growth and fiscal flexibility above our expectations, the risk qualifier explained.
Institutional problems and lower levels of economic growth compared to other countries with the same risk rating, could cause in the future a degradation of Guatemala's debt rating.
Moody's kept the rating of long-term issues and senior unsecured bonds at B1, arguing that there is a "solid fiscal framework that has stabilized debt at lower levels compared to its rated peers.
Honduras' fiscal balance behaves favorably with respect to GDP and has been enough to stabilize overall government debt at around 41% of GDP, Moody's report explains.
"The 'B-' rating reflects the recent history of local currency defaults, as well as the political uncertainties influencing congressional approval of key economic reform measures."
This is the second consecutive year that the agency decided not to change the country's rating, as Fitch Ratings reported a year ago that it had decided to maintain the rating of foreign currency debt at "B-", and on that occasion argued that political tensions made it difficult to reach agreements on government financing.
The rating agency decided to keep the debt rating at B3 with a stable outlook, arguing that the country's tax burden is high, but stable.
The last rating variation was made in February 2018, when it was reported that at that time the political agreement reached to approve the resources to pay pension funds and the reduction in liquidity risk based the decision of the rating agency to raise the score from Caa1 to B3.