S&P pulls Guatemala from watch

S&P said it removed Guatemala’s long-term foreign- and local-currency sovereign credit ratings from CreditWatch with negative implications, where they had been placed on Nov. 20. and affirmed the ratings at BB-.

After Guatemala paid TECO Guatemala Holdings, Bank of New York Mellon disbursed a $15.75 million coupon payment on a $700 million 2026 eurobond to bondholders.

The coupon payment was made within the 30-day grace period ending Dec. 3. Previously, a US court restraining order blocked the payment due to a commercial dispute between Guatemala and TECO. The claim by TECO commenced in 2009 as a commercial dispute on electricity tariffs, the agency said.

The outlook is stable. “The stable outlook reflects our view that despite recent legal challenges, the sovereign will remain committed to timely and full payment of its debt service obligations. We expect that a combination of economic recovery starting next year and cautious economic policies will help reverse the near-term deterioration in Guatemala’s fiscal and debt profiles, limiting the long-term negative impact on its financial profile,” S&P said in a press release.

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