SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Chile’s long-term foreign currency rating was downgraded by S&P to A from A+ with a change in outlook to stable from negative. S&P cited Chile’s weaker fiscal flexibility and estimated higher fiscal deficits than previously predicted over the next two to three years as a result of spending pressure. However, Chile still maintains a “comparatively low debt burden, high monetary flexibility, and institutional strengths,” S&P said.  The stable outlook was given due to the planned continuation of key economic policies and expected changes in political leadership.

On the same day, Chile’s credit rating was affirmed at a A- with a stable outlook by Fitch. The rating agency explained, “Chile’s ratings are supported by a credible policy framework,” in reference to its “inflation-targeting regime”, flexible exchange rate and comparatively strong balance sheet. Fitch predicts that Chile will see a growth in GDP of 6.1% in 2021, after a decline of 5.8% in 2020, and pointed to Chile’s relatively quick progress in vaccinations with 29% of its population having received at least the first dose.

Chile´s dollar bonds were slightly down, it´s 2.55% 2032 0.22 to 101.476, yielding 2.39%.

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