Moody’s rates El Salvador bond B3

Moody's Investors Service said it assigned a senior unsecured B3 rating to El Salvador's bond for $601,085,000 maturing on Feb. 28, 2029.

The coupon is 8 5/8%

The B3 rating on the bond mirrors the Government of El Salvador's B3 (negative) issuer rating.

Moody's said it downgraded El Salvador's issuer and long-term debt ratings on Nov. 7 to B3 from B1 and assigned a negative outlook.

The key drivers for the two-notch downgrade to B3 are: (a) The significant increase in liquidity risks as (1) the government is already under financial stress and has been forced to prioritize payments and (2) short-term debt continues to rise reaching record-high levels that are starting to challenge local banks' capacity and willingness to absorb additional amounts; and (b) the political impasse in the legislative assembly that leaves the government without necessary approval to issue sufficient long-term debt to retire short term debt and fund its operations.

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