S&P gives Dominican Republic bond B

Standard & Poor's said it assigned its B long-term local currency rating to the Bono 119-05 bond recently issued by the Dominican Republic (B/positive/B sovereign credit ratings).

The bond, issued in two equal tranches on Aug. 8 and Aug. 11, totaling Dominican peso 1.6 billion, were used to pay supplier arrears, the agency said.

S&P noted that the ratings on the Dominican Republic reflect a moderate stock of debt at 39% of GDP, compared with the B median's 48%, a higher level of economic development and a more diversified economy compared with those of its peers.

The ratings are constrained by weak institutions and poor governance that have the ability to undermine macroeconomic stability and monetary constraints due to the central bank's large quasi-fiscal deficits, the agency added.

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