Research Update: Republic of Suriname FC Ratings Lowered To 'SD'; Issue-Level Rating On December 2023 Bond Lowered To 'D'

On July 9, 2020, Suriname received approval from the holders of its US$125 million December 2023 bond to amend its terms, which we view as a distressed debt restructuring. In line with our criteria for exchange offers, we are lowering our long-term foreign currency sovereign credit rating to 'SD' from 'CCC+' and our issue-level rating on the December 2023 bond to 'D' from 'CCC+'. We are also lowering our long-term local currency sovereign credit rating, as well our unsecured issue-level rating, on the country's US$550 million bonds due in October 2026 to 'CCC-' from 'CCC+', and our transfer and convertibility assessment on Suriname to 'CCC-' from 'CCC+'. The outlook on our local currency credit ratings is negative. On July 13,

...Key rating factors Score Explanation Institutional assessment 6 Weak political institutions are resulting in an uncertain policy environment in periods of stress resulting is a diminished capacity to maintain timely debt service. Economic assessment 6 Based on GDP per capita as per Selected Indicators in Table 1. Weighted average real GDP per capita trend growth over a 10-year period is below sovereigns in the same GDP category. Concentrated economy with gold mining and related manufacturing representing more than 20% of GDP. Material revisions to economic and fiscal data are common and add uncertainty. External assessment 4 Based on narrow net external debt and gross external financing needs as per Selected Indicators in Table 1. Fiscal assessment: flexibility and performance 6 Based on the change in net general government debt (% of GDP) as per Selected Indicators in Table 1. Suriname has a volatile revenue base since mining revenues represented about one third of total revenues. Fiscal...

Research Update