El Salvador Credit Ratings: S&P maintains El Salvador’s rating at B- with a Stable Outlook

By Eddie Galdamez  | Updated on Apr 18th, 2024
El Salvador Credit Ratings Zona Rosa, San Salvador. Image by Morena Valdez.

On Thursday, April 15th, the S&P Global Ratings agency declared that it would uphold El Salvador’s sovereign risk rating at B-, maintaining a stable outlook.

S&P Global is the first credit rating agency to respond following the Salvadoran government’s announcement of its reentry into the international market after a four-year hiatus.

El Salvador’s Credit Ratings in 2024 are B- with a stable outlook from Standard & Poor’s Global Ratings agency, CCC+ from Fitch, and Caa3 with a stable outlook from Moody’s.

El Salvador Credit Ratings
Agency Rating Outlook Date
Standard & Poor’s B- Stable September 7, 2023
Fitch Rating CCC+ N/A May 5, 2023
Moody’s Caa3 Stable February 3, 2023

Implementing Bitcoin as a legal tender has contributed to the rating agency’s perspective on El Salvador’s credit ratings. In September 2022, El Salvador became the first country to make Bitcoin a legal tender, which the Bukele administration has no plans to discontinue,

SEE ALSO: Financial Inclusion, a problem that affects many Salvadorans and businesses

Standard & Poor’s Rating

On September 7, 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.

Standard & Poor’s Rating for El Salvador since 2014
Date Rating Outlook
September 7, 2023 B- Stable
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

Moody’s Rating

El Salvador’s credit rating with Moody’s stands at Caa3 with a stable outlook. The credit agency reconfirmed the rating on February 2, 2024.

The credit agency stated that “The lack of a credible medium-term fiscal and financing framework, along with weak governance, undermine policy predictability and continue to weigh on creditworthiness.”

Without a clear medium-term fiscal strategy and continued reliance on costly domestic debt, El Salvador’s relatively large financing needs have eroded its fiscal strength despite substantial progress on narrowing the fiscal deficit and maintaining it at a level that supports stable debt metrics. Moody’s.

Moody’s Rating for El Salvador Since 2015
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

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.”

Fitch Rating for El Salvador since 2015
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

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.