Fitch Grades Guatemalan Bonds as BB +

The grading by Fitch Ratings relates to the recent bond issue of $700 million that Guatemala recently placed in the markets.

Friday, June 1, 2012

The Guatemalan Treasury bonds mature on June 6, 2022, with an interest rate of 5.75%, reported Reuters.

This rating of BB + is consistent with the Issuer Default Rating which describes the behavior of the economy, its macroeconomic stability, strength of the debt and low charges on public debt, and external comparison with other states graded as BB.

Despite the difficulties that a fiscal consolidation may present, because of the expense and rigidity of structural problems, the funding needs of Guatemala are still lower than their peers thanks to its low debt level and the fact that a large part of its foreign debt is with multilateral institutions.

More on this topic

Fitch Ratings Affirms Rating of BB + for Guatemala

August 2012

The agency has affirmed the international rating of Guatemala as 'BB +' with Stable Outlook.

From a statement by Fitch Ratings:

Fitch Ratings-New York-31 July 2012: Fitch Ratings has affirmed the issuer default rating (IDR) and the Country Ceiling for Guatemala as follows:

Moody's downgrades El Salvador´s Debt Rating

March 2011

Moody's downgraded the rating to "Ba2" from "Ba1", citing a continued deterioration of the country's financial condition.

In a statement the rating agency stated, "The metrics for sustainability of government debt (including debt to income ratio) are not consistent with a grade of 'Ba1' in light of the limited prospects for growth the country has," Yahoo News published.

Fitch Lowers Rating Outlook for El Salvador

July 2012

Fitch Ratings has downgraded the economic perspective of the rating, making it negative outlook BB.

From the press release by Fitch Ratings:

Fitch Ratings - New York - July 24, 2012: Fitch Ratings affirms its ratings for El Salvador as follows:
- Long-Term Ratings (IDR) in foreign currency and local currency 'BB';

Guatemala Faces Four Risks

June 2009

Guatemala´s BB+ sovereign risk rating and stable perspective, which is so close to the desired “Investment Grade,” is facing four threats.

According to an article by C.Véliz and J. Gramajo in Sigloxxi.com, Mauricio Choussy, the director of Fitch Central America, notes that four weaknesses persist in the country: “Low tax revenue, weak social indicators, social instability, and high levels of delinquency.”

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