S&P Affirms Ratings on El Salvador; Outlook Stable.Business Editors NEW YORK--(BUSINESS WIRE)--June 7, 2004 Standard & Poor's--Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. said today that it affirmed its 'BB+' long-term and 'B' short-term sovereign credit Sovereign credit is the credit of a sovereign country backed by the financial resources of that state. Sovereign credit is the opposite of sovereign debt. Fiat money is sovereign credit and sovereign bonds are sovereign debts. When money buys bonds, sovereign credit cancels sovereign debt. ratings on the Republic of El Salvador El Salvador (ĕl sälväthōr`), officially Republic of El Salvador, republic (2005 est. pop. 6,705,000), 8,260 sq mi (21,393 sq km), Central America. . The outlook remains stable. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Standard & Poor's Ratings Services credit analyst Richard Francis Richard Francis (dates unknown) was a famous English cricketer who played for the Hambledon Club. Francis is known to have been a Surrey man by birth and he had played for Surrey teams before moving to Hampshire. He made 47 known first-class appearances from 1773 until 1793. , the ratings are supported by El Salvador's strong and well-regulated banking system, long-standing program of structural reform, moderate debt, and falling interest rates-although widespread poverty, demands on fiscal policy, and limited economic growth pressure the country's credit standing. "The stable outlook balances the risk associated with El Salvador's still significant (albeit improving) fiscal deficit for a fully dollarized economy against the anticipated boost to economic growth and flexibility supported by structural reform and monetary stability," Mr. Francis said. "The government has no monetary flexibility, and it is therefore imperative that fiscal performance be prudent," he added. Mr. Francis explained that interest rates have fallen by more than half because of the stable monetary environment created by the 2001 adoption of the U.S. dollar as the local currency. Inflation, which has not been a problem in recent years, is expected to closely follow that of the U.S., and balance-of-payments risk has been substantially reduced. This should facilitate investment, in concert with the anticipated approval of the Central American Central America A region of southern North America extending from the southern border of Mexico to the northern border of Colombia. It separates the Caribbean Sea from the Pacific Ocean and is linked to South America by the Isthmus of Panama. Free Trade Agreement. "If the fiscal deficit fails to decline and growth falters, the credit standing of the government could come under pressure," Mr. Francis noted. However, if fiscal discipline is strengthened significantly (most likely through further improvements in revenue generation) and economic growth rises, El Salvador's ratings could improve," he noted. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar A set of buttons or graphic images typically in a row or column used as a central point that link you to major topic sections on a Web site. If the navigation bar is a single graphic image with multiple selections, it is known as an imagemap. See imagemap. , select Find Ratings, then Credit Ratings Search. Copyright (c) 2004, Standard & Poor's Ratings Services |
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