Ecuador Raised to B+ at S&P on Improved Financing, Liquidity

Ecuador’s credit rating was increased one level by Standard & Poor’s on the outlook for better access to financing and more pragmatic economic policies.

S&P raised the country’s long-term sovereign credit rating to B+, four levels below investment grade, from B, the company said today in a statement. The outlook for the rating is stable, S&P said.

The rating upgrade follows the government’s sale of $2 billion of foreign bonds in June, its first since defaulting on most of its international debt in 2008 and 2009. Before selling the bonds, President Rafael Correa bought back most of the country’s outstanding defaulted debt, renewed talks with the International Monetary Fund and announced that the World Bank had doubled the nation’s credit line to $1 billion.

“We raised the long-term ratings on Ecuador as a result of the government’s greater fiscal flexibility, better external liquidity position, and the improving investment climate in the country,” S&P analysts Richard Francis, Sebastian Briozzo and Kelli Bissett-Tom said in the statement. “Over the past two years, the government has shown greater signs of pragmatism with efforts to attract foreign direct investment in the oil and mining sectors, re-engage multilateral institutions such as the International Monetary Fund and World Bank, and boost public investment to try to stimulate economic growth.”

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