S&P downgrades Suriname

S&P said it lowered the long-term sovereign credit rating on the Republic of Suriname to B from B+.

The outlook is negative.

The agency also said it revised the transfer and convertibility assessment on Suriname to B+ from BB-.

S&P also said it assigned a B senior unsecured debt rating to Suriname's $550 million 10-year bond and affirmed its B short-term issuer credit rating on the country.

The downgrades reflect a worsening of the country's financial profile and economic strength following a significant economic contraction in 2016, which resulted in higher government debt, a substantial currency de-valuation and high inflation, the agency said.

Suriname's per capita GDP fell 7.5% in 2016 to about $7,400, S&P said.

Despite a projected stabilization in GDP in 2017, the agency said it lowered the economic assessment because economic growth rates are below the range expected for countries at a similar level of per capita GDP.

Real GDP will get a boost in 2017 by a full-year of production at Suriname Gold Co. LLC's recently opened Merian gold mine, S&P added.

But weak domestic demand because of continued fiscal adjustments and recent declines in real wages will offset this, the agency said.

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