S&P rates Guatemala notes BB

Standard & Poor's said it assigned a BB rating and 3 recovery rating on the Republic of Guatemala's $700 million notes due June 6, 2022 with a coupon of 5.75%.

Limited fiscal flexibility and developing institutions constrain ratings on Guatemala, S&P said.

But the ratings are supported by Guatemala's diverse economy, which is the largest in Central America and serves the rest of the region, the agency said. In addition, external debt and financing needs are generally in line with those of peers, S&P added.

The negative outlook reflects the potential for a downgrade if recently enacted tax reform and other measures to enhance revenue collection are insufficient to strengthen fiscal performance, the agency said.

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