2024-05-24 11:37:30
President Nayib Bukele introduced that the distinguished danger ranking company, Moody’s, raised El Salvador’s danger two notches, going from Caa3 to Caa1.
“This enchancment is pushed by a big lower in credit score dangers, from very excessive danger ranges, for the sovereign, given a decrease likelihood of liquidity stress episodes,” the company says in an announcement. For the entity, the buyback of bonds that the Ministry of Finance made final April considerably decreased the amortizations of the exterior debt till 2027.
Moody’s factors out that the extension of the phrases of the medium and long-term inner debt has decreased the nation’s monetary wants.
Moody’s analyst for El Salvador, Jaime Reusche, highlighted that that is the second enhance within the danger ranking for the nation, the primary company to take action was Normal & Poors.
The federal government bought a part of the debt prematurely in bonds for 2025, 2027 and 2029. By January 2025, the Authorities of El Salvador will solely must pay $99 million.
To this, President Nayib Bukele reacted: “Sure, sure, we’re nonetheless distant; “However we simply climbed two extra stairs.”
The ranking company famous that the compensation danger for the 2025 bonds has decreased considerably given the small quantity of principal excellent, leaving solely $99.6 million in principal at face worth.
Moreover, the federal government has put aside a part of the funds raised from the April bond issuance to cowl the remaining principal of the January 2025 bond. The improved exterior amortization profile helps decrease compensation danger.