S&P downgrades Belize

Standard & Poor's said it lowered the long-term foreign- and local-currency sovereign credit ratings on the government of Belize to B- from B, along with the short-term foreign- and local-currency sovereign credit ratings to C from B.

The ratings were removed from CreditWatch, where they were placed in June with negative implications, S&P said.

The outlook is stable.

The agency also said it revised its transfer and convertibility assessment on Belize to B- from B+ with the 3 recovery rating on senior unsecured debt affirmed.

The downgrades reflect Belize's higher fiscal deficit and rising contingent liabilities, which reduces its fiscal flexibility, the agency said.

Constraining the ratings are Belize's substantial fiscal and external debt burdens, despite debt rescheduling in 2007, along with weak political institutions and slow economic growth, S&P said.

Official external financing and a favorable external amortization profile support the ratings, the agency said.

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