Research Update: Republic of Suriname Foreign Currency Rating Lowered To 'SD'; Issue-Level Rating On Bond Due 2026 Lowered To 'D'

The recently elected government of Suriname has announced a proposed standstill on the repayment of its foreign currency-denominated debt service obligations. It has not made the interest payment due on Oct. 26, 2020, for its US$550 million 2026 notes and we do not believe the payment will be made within 30 calendar days after the due date. In line with our ratings definitions, we are lowering our long-term foreign currency sovereign credit rating to 'SD' from 'CCC' and our issue-level rating on the 2026 bonds to 'D' from 'CCC'. We are also lowering our long-term local currency sovereign credit rating and issue-level rating on the country's US$125 million bond due in December 2023 to 'CC' from 'CCC'. The outlook on

...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 Debt payment culture is weak, demonstrated by the recent bond restructuring. 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 6 Based on narrow net external debt and gross external financing needs as per Selected Indicators in Table 1. There is a risk of marked deterioration in the cost of or access to external financing due to financial sector operating in a more difficult environment. The country has constraints on...

Research Update