El Salvador Credit Ratings: Fitch Ratings Upgrades El Salvador’s Rating to B- With a Stable Outlook

On January 7, the Fitch Ratings Credit Agency raised El Salvador’s credit rating to B- from CCC+, with a stable outlook, following the government’s reduced financing needs due to its technical agreement with the International Monetary Fund (IMF).

In December 2024, the IMF announced a staff-level agreement with El Salvador for a new loan program of approximately $1.4 billion to support government reforms.

“The upgrade of El Salvador’s rating to ‘B-‘ reflects the reduction in financing needs and easing of financing constraints supported by the regaining of market access and recently announced IMF program,” remarked the credit agency.

As of January 2025, El Salvador’s Credit Ratings are B- with a stable outlook from Fitch Ratings, B3 with a stable outlook from Moody’s, and B- with a stable outlook from Standard & Poor’s Global Ratings Agency.

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Fitch Ratings

After El Salvador and the International Monetary Fund (IMF) reached a technical agreement for a 1.4 Billion loan, the Fitch Ratings Credit Agency raised El Salvador’s credit rating to B- from CCC+, with a stable outlook.

According to Fitch, the IMF agreement, the reduction of short-term debt with private banks, and the debt repurchase processes will help fiscal consolidation, eventually reducing the country’s financing needs.

Moody’s Rating

In November 2024, the rating agency Moody upgraded El Salvador’s credit rating from Caa3 to B3 and maintained its stable outlook for the country.

The upgrade of the ratings to B3 reflects our view that the sovereign’s credit profile has benefited from recent liability management operations that have significantly reduced external amortizations leading to a material decrease in repayment risk and alleviating near and medium-term liquidity pressures. Moody’s.

The Salvadoran government has made three bond buybacks in 2024, and the Ministry of Finance states that this has saved the country $745 million.

Standard & Poor’s Rating

On September 2023, the rating agency Standard and Poor’s upgraded El Salvador’s credit rating from CCC+ to B- and maintained its stable outlook for the country.

“We raised our sovereign credit ratings on El Salvador to B-/B because we consider that the government’s recent program to gradually refinance its short-term debt with local banks will reduce rollover needs and mitigate the risk of a default over the next two years,” noted the credit rating agency.