Moody’s downgrades El Salvador’s government bond ratings due to financial crisis

Moody’s Investors Services announced on 7 November 2016 that it downgraded El Salvador’s issuer and long-term debt ratings from B1 to B3 with a negative outlook after concluding a review for downgrade that began on 11 August (El Diario de Hoy). The ratings agency downgraded El Salvador due to significant increase in liquidity risks, as well as the Legislative Assembly’s inability to pass a measure to release long-term debt via bonds to solve the short-term debt issue and finance government operations. Moody’s also lowered the long-term foreign-currency bond and deposit ceilings from Ba2 to B1, while short-term foreign-currency bond and deposit ceilings remained the same (Moody's).