S&P gives El Salvador bond BB+

Standard & Poor's said it assigned its BB+ senior unsecured debt rating to the Republic of El Salvador's (BB+/stable/B sovereign credit ratings) reopened 7.65% global bond due in 2035.

The agency said that with the recent $225 million issue, the total amount outstanding on this bond is now $1 billion.

S&P added that the ratings on El Salvador are supported by a stable monetary environment created by the 2001 adoption of the dollar as the local currency, a fairly strong and well-regulated banking system relative to those of its neighbors as well as strong and increasing flows of workers remittances.

The ratings are constrained by low levels of investment and savings, a relatively low tax base and the increasing cost of pension reform, which continue to limit fiscal flexibility and external competitiveness that has weakened in recent years, reflected in stagnant export growth and low levels of foreign direct investment, the agency noted.

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