S&P lifts El Salvador

S&P said it raised the long-term foreign- and local-currency sovereign credit ratings on the Republic of El Salvador to CCC+ from SD (selective default).

The outlook is stable.

The agency also said it raised the short-term rating to C from SD (selective default) and raised the issue-level rating on the foreign-currency senior unsecured debt to CCC+ from CCC.

The AAA transfer and convertibility (T&C) assessment is unchanged.

These actions follow the completed CIPs restructuring, the announced amendments of which took effect within the five working days period stated on a legislative bill approved Sept. 28, S&P explained.

The agency said it lowered the ratings to SD because it characterizes that restructuring as a distressed exchange.

The recently approved pension reform will alleviate the government's structural deficit and reduce its short-term financing needs, S&P said.

However, the ratings on El Salvador reflect that the government still faces the challenge of reaching further agreements on fiscal policy, high debt burden and limited economic growth prospects, the agency said.

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