PARAMARIBO, Suriname, CMC – International Credit rating agency Standard & Poor’s (S&P) has positively adjusted Suriname’s credit rating.
Due to the macroeconomic developments, including the various reforms and the recent debt restructuring with the so-called Oppenheimer bondholders, Suriname is out of the ‘Selective Default SD’ status. Suriname’s credit rating has been adjusted upwards and is now categorized as ‘CCC+/C.’ In a press release, S&P indicates that the rating has been adjusted partly due to the issuance of new bonds that completed the debt rescheduling with the Euro bondholders.
Minister Stanley Raghoebarsing of Finance and Planning responded “positively” to this development. “The rating is making significant progress, and it is once again recognition – internationally – of our collective efforts with society as a whole, and the fact that those efforts and sacrifices yield good results,” said the minister. According to the minister, Suriname is now free of default status, meaning investors can do business more efficiently. “For Staatsolie, for example, it means that the risks are fewer and money for investments can be borrowed under much better conditions – including lower interest rates. We are clearly on the right path. But there is still a lot to do,” says the minister. He adds that many thanks go to the entire people of Suriname for their trust and continued support, “even though the circumstances were sometimes not easy.”
According to S&P, holders of two Eurobonds received new debt instruments with a face value of US$ 660 million and oil-linked security in exchange for debt that has been in default since the end of 2020.
This exchange applied to holders of Suriname’s notes due 2023 and notes due 2026. At the same time, according to S&P, Suriname has reached restructuring agreements with all official creditors, excluding China; commercial creditors that had provided export credit agency-backed loans; and the Central Bank of Suriname; and is finalizing agreements with other commercial domestic and foreign creditors for small amounts of remaining debt.
“We believe these negotiations will conclude the resolution of Suriname’s defaulted obligations and are adopting a forward-looking opinion on the sovereign’s creditworthiness on its foreign and local currency obligations,” the rating agency said.
However, S&P warns that they could lower their ratings over the next six-12 months if expected financing from multilateral lending institutions fails to materialize, or other policy or administrative developments raise the likelihood of another default.
On the other hand, it could adjust its ratings upwards over the next year if the government continues to progress on concluding restructuring agreements with its creditors, progress on its reform targets, and meet the conditions of multilateral lending institutions with which it has agreements.
The agency said that developing a track record of strengthened debt management and proactive economic policies that reduce the likelihood of another commercial debt payment default could also bolster Suriname’s chances for an improved credit rating in the near future.
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