El Salvador’s Credit Ratings in 2023 are CCC+ with a stable outlook from Standard & Poor’s, CCC+ with no outlook from Fitch’s rating, and Caa3 with a stable outlook from Moody’s.
The latest update on Salvadoran credit rating was done by S&P Global Ratings on May 10, 2023. S&P Global increased the rating for El Salvador to CCC+ with a stable outlook from SD.
S&P Global lowered El Salvador’s rating to SD on May 9, for one day, because, according to them, “distressed debt exchange under our criteria is tantamount to default.”
| Agency | Rating | Outlook | Date |
|---|---|---|---|
| Standard & Poor’s | CCC+ | Stable | May 10, 2023 |
| Fitch Rating | CCC+ | N/A | May 5, 2023 |
| Moody’s | Caa3 | Stable | February 3, 2023 |
The payment of the 2023 debt, which many remarked that El Salvador was not going to be able to repay, was not enough for the country to improve its credit score with the rating agencies.
The implementation of Bitcoin as a legal tender, which the Bukele administration has no plans to discontinue, has contributed to the rating agency’s maintaining the same ratings. In September 2022, El Salvador became the first country to make Bitcoin a legal tender.
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Standard & Poor’s Rating
On May 10, 2023, the rating agency Standard and Poor’s upgraded El Salvador’s credit rating from SD to CCC+ with a stable outlook.
On May 9, El Salvador had his credit rating downgraded to SD because the country conducted a pension debt exchange that, according to S&P Global, was a default.
However, according to the rating agency, the financial stress of the pension debt exchange had been cured, and the country’s credit rating was increased to CCC+ with a stable outlook.
The stable outlook reflects our view of balanced risks between El Salvador’s limited financing alternatives and decreasing financing needs, following better-than-expected fiscal results, recent pension debt exchange, and two Eurobonds partial repurchases in the last year. We believe the government could tap alternative sources of liquidity to meet its debt service payments over the next 12 months.
S&P Global Ratings.
| Date | Rating | Outlook |
|---|---|---|
| May 10, 2023 | CCC+ | Stable |
| May 9, 2023 | SD | Negative |
| June 1st, 2022 | CCC+ | Negative |
| October 21st, 2021 | B- | Negative |
| December 28th, 2018 | B- | Stable |
| December 14th, 2017 | CCC+ | Positive |
| October 3rd, 2017 | CCC+ | Stable |
| May 5th, 2017 | CC | Negative |
| April 13th, 2017 | CCC- | Negative Watch |
| December 8th, 2016 | B- | Negative |
| October 16th, 2016 | B | Negative Watch |
| October 6th, 2016 | B+ | Negative Watch |
| December 22nd, 2014 | B+ | Staple |
Fitch Ratings
The risk rating firm Fitch Ratings raised El Salvador’s credit rating in three notches, going from CC in its February report to CCC+ in the document they shared on May 5.
El Salvador’s CCC+ rating reflects fiscal and external liquidity positions that have improved relative to Fitch’s previous expectations.
Fitch highlights that the improvement in the rating is due in large part to the payment on time and with the interest of the 2023 bond made by the Government, as well as to the success in the debt repurchase operations while affirming that another event of default “it no longer seems likely.”
| Date | Rating | Action |
|---|---|---|
| May 5, 2023 | CCC+ | N/A |
| January 2, 2023 | CC | Affirmed |
| September 15, 2022 | CC | Doungrade |
| July 13, 2022 | CCC | Under Criteria Observation |
| February 9, 2022 | CCC | Downgrade |
| April 27, 2021 | B- | Affirmed |
| April 30, 2020 | B- | Affirmed |
| June 11, 2019 | B- | Affirmed |
| June 13, 2018 | B- | Affirmed |
| October 6, 2017 | B- | Upgrade |
| April 10, 2017 | CCC | Downgrade |
| February 1, 2017 | B- | Downgrade |
| July 7, 2016 | B+ | Affirmed |
| July 9, 2015 | B+ | Downgrade |
| July 11, 2014 | BB- | Affirmed |
Moody’s Rating
El Salvador’s credit rating with Moody’s stands at Caa3 with a stable outlook. The credit agency confirmed the rating on February 3, 2023.
The credit agency stated that it had changed the country’s economic outlook because it “reflects Moody’s view of a decreased risk of a credit event in the near term, following the distressed exchange in 2022 and the recent repayment of the 2023 international bond.”
The affirmation of the Caa3 rating reflects Moody’s view that persistently high financing needs, a lack of access to international capital markets, low debt affordability, and the lack of a credible medium-term fiscal and financing framework will continue to weigh on creditworthiness.” Moody’s.
| Date | Rating | Outlook |
|---|---|---|
| February 3, 2023 | Caa3 | Stable |
| May 4, 2022 | Caa3 | Negative |
| July 30, 2021 | Caa1 | Negative |
| February 5, 2021 | B3 | Negative |
| November 16, 2020 | B3 | Under Review |
| March 12, 2020 | B3 | Positive |
| February 23, 2018 | B3 | Stable |
| April 13, 2017 | Caa1 | Stable |
| November 7, 2016 | B3 | Negative |
| Ausust 11, 2016 | B1 | Negative |
| November 19, 2015 | Ba3 | Negative |
El Salvador Credit Ratings
In 2023, El Salvador’s credit ratings are at some of the lowest possible levels. According to the rating agencies, the Salvadoran debt has junk status with imminent default and little prospect for recovery.
The implementation of Bitcoin as a legal tender and the current situation between the Nayib Bukele administration and the United States are two other reasons El Salvador will continue to have a low credit rating.
