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Ecuador sinks deeper as a junk bond
Posted On 30 Jun 2017
Ecuadornews:
Ecuador’s difficulties in tackling its level of indebtedness and limited funding alternatives have further deteriorated the country’s position as a junk bond. International rating agency Standard & Poor’s (S & P) yesterday lowered the long-term rating from B to B-. A junk bond is the debt consideration for countries with a rating of B or lower as for risk. It is considered highly speculative and is accompanied by a higher interest rate in case of issuing foreign debt.
Ecuador (B-) and Argentina (B) are the two countries in South America that are in the category of junk bonds, only surpassed by Venezuela (CCC), which is already considered a substantial risk. The worse the rating, the greater the interest a country must pay to access financing in the markets and the shorter the term. (I)
Source: http://www.expreso.ec/economia/ecuador-se-hunde-mas-como-bono-basura-FB1506654
