Beoordeling vanwege US$ 125 miljoen lening via Oppenheimer Funds Fitch Ratings heeft maandag 13 juli 2020 de kredietwaardigheid van Suriname verlaagd naart het laagste niveau, RD (restrictive default status), wat inhoudt dat het land zijn schulden in buitenlandse valuta niet kan betalen. Suriname gaat van een C-notering naar RD. Dit meldt Starnieuws.
De beoordeling slaat op de US$ 125 miljoen lening die vorig jaar is aangegaan via Oppenheimer Funds om de schulden bij de Alcoa te betalen voor de overdracht van de Afobakadam.
President-elect Chandrikapersad Santokhi merkte maandagmorgen na zijn uitverkiezing nog op, dat Suriname aan de rand stond van een default, maar dat dat voorkomen moest worden. De verlaging van Surinames kredietwaardigheid volgt op de overeenkomst die commerciële obligatiehouders op 9 juli met de regering zijn aangegaan om een andere betalingsschema voor de 2023-obligaties te hanteren.
Fitch vindt, dat er een wezenlijke wijziging van de voorwaarden van de oorspronkelijke aandelen is overeengekomen om een traditionele betalingsachterstand te voorkomen door het verstrijken van de uiterlijke betaaldag van 10 juli. Het komt volgens de kredietbeoordelaar op een herstructurering van de schulden en een wanbetalingshandeling.
Suriname slaagde er niet in om op 30 juni in totaal US$ 23 miljoen aan rente en afbetaling bij elkaar te krijgen. Van de rente, zo'n US$ 8 miljoen, wist de regering US$ 6,7 miljoen af te lossen. De wijzigingen die nu zijn overeengekomen omvatten dat de eerste aflossing van de lening - US$ 15 miljoen - is verschoven naar 30 december 2020 en dat deze gevolgd wordt door zes halfjaarlijkse aflossingen van US$ 18,3 miljoen.
Oorspronkelijk moest op 30 juni US$ 15,6 miljoen van het hoofdbedrag worden afbetaald. Voor de US$ 550 miljoen obligatie die in 2026 verstrijkt, handhaaft Fitch de 'CC'-beoordeling. Op 26 oktober dit jaar moet de eerste aflossing van deze obligatie ook worden gedaan.
Fitch beschouwt het risico van een bredere herstructurering van schulden in vreemde valuta als hoog. Het neemt daarbij in ogenschouw de hoge overheidsschuldenlast, het acute tekort aan vreemde valuta en de zware financieringsvoorwaarden.
https://www.fitchratings.com/research/sovereigns/fitch-downgrades-suriname-lt-fc-idr-to-rd-13-07-2020
Fitch Ratings - New York - 13 Jul 2020: Fitch Ratings has downgraded Suriname's Long-Term Foreign-Currency (FC) Issuer Default Rating (IDR) to 'RD' from 'C'.
KEY RATING DRIVERS
The downgrade of Suriname's LT-FC IDR to 'RD' and the issue rating on Suriname's 2023 notes to 'D' from 'C' follows the agreement by commercial bondholders on July 9 to the government's "consent solicitation" dated June 30 to amend the amortization schedule of Suriname's 2023 notes and the related accounts agreement. Fitch deems that a material change of terms of the original securities was agreed to avoid a traditional payment default by the expiration of the grace period on July 10, which constitutes a distressed debt restructuring and a default event according to Fitch's sovereign rating criteria.
The amendments to Suriname's USD125 million 2023 notes reschedule the date of the first principal payment to Dec. 30, 2020 in an amount of USD15 million followed by six semiannual installments of USD18.3 million. Originally, the notes were to amortize via USD15.6 million principal payments starting June 30. Further changes to terms of the related accounts agreement, including provisions relating to the state oil company's dividend, grant the sovereign greater FC cash flow flexibility. A USD8.0 million interest coupon due June 30 fell into a 30-calendar-day grace period and was subsequently paid.
Fitch is affirming the 'CC' rating on Suriname's USD550 million 2026 notes on which interest payment the government is current. The next coupon payment on the 2026 notes is due Oct. 26, 2020.
Fitch views the risk of a broader restructuring of FC debt as high, reflecting the government's high government debt burden, acute shortage of FC and distressed financing conditions. Large government operational deficits averaging 10.4% of GDP during the past three years (2017-2019) have increased Suriname's high government debt burden, which Fitch expects to exceed 100% of GDP at the end of 2020 up from 80% of GDP in 2019.
Suriname's external liquidity position is exceptionally low with unrestricted international reserves (including gold) at USD188 million in May. Suriname's international reserves have come under pressure during 2019-2020 as a result of widened current account deficits driven by large government deficits, increased imports, and more recently low oil export prices. On the capital account, FX cash outflows have also been recorded. Net external debt is high at 58% of GDP at YE 2019, nearly double the current 'B' median. Fitch expects the central bank to implement an exchange-rate adjustment in the near term; the parallel exchange market continues to show a material premium over the official stabilized SRD-USD exchange rate.
ESG Considerations:
ESG - Governance: Suriname has an ESG Relevance Score (RS) of 5 for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as is the case for all sovereigns. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in Fitch's proprietary Sovereign Rating Model. Suriname has a medium WBGI ranking at the 43rd percentile, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption. In November 2019, a Suriname court convicted President Bouterse for the execution of 15 civic dissidents in 1982 during the former military government he led.
ESG - Creditor Rights: Suriname has an ESG Relevance Score (RS) of 5 for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight.
SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)
In accordance with its rating criteria, Fitch's sovereign rating committee has not utilized the SRM and QO to explain the ratings, which are instead guided by the ratings definitions.
Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within Fitch's criteria that are not fully quantifiable and/or not fully reflected in the SRM.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a positive rating action/upgrade:
--Completion of the distressed debt restructuring of the 2023 bonds.
Factors that could, individually or collectively, lead to a negative rating action/downgrade:
--The rating for the LT Local Currency IDR would be downgraded to 'CC' if a default becomes probable and to 'C' if the government announces plans to restructure its Suriname dollar-denominated debt.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579].
KEY ASSUMPTIONS
--Fitch expects global indicators to move broadly in line with Fitch's Global Economic Outlook forecasts;
--Fitch's baseline forecasts exclude the impact of Apache Corp. and Total S.A.'s find of significant, but as yet unquantified, oil reserves in Suriname waters on Suriname's balance of payments (given the discovery's early nature) as well as the first oil production (which has a roughly three- to five-year development timeline).
SUMMARY OF DATA ADJUSTMENTS
--Fitch analyses government operations on a cash basis (which includes net payments of supplier arrears) using published Ministry of Finance statistics on arrears flows because this treatment better explains the scale of the government's financing needs and change in government debt/GDP during 2015-2019, in our view, than the government commitment balance also published by the Ministry of Finance;
--Fitch values government debt at reference period-end market exchange rates; this differs from valuation according to Suriname's National Debt Law.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.--The stock of government arrears to suppliers is not publicly disclosed. However, the flows of arrears incurred and payments thereof are publicly disclosed;
--Financial soundness indicators of the banking system are released periodically for the IMF Article IV reports, but not published on a regular basis.
ESG CONSIDERATIONS
Suriname has an ESG Relevance Score of 5 for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are highly relevant to the rating and a key rating driver with a high weight.
Suriname has an ESG Relevance Score of 5 for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as WBGI have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight.
Suriname has an ESG Relevance Score of 5 for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight.
Suriname has an ESG Relevance Score of 4 for Human Rights and Political Freedoms as the Voice and Accountability pillar of the WBGI are relevant to the rating and a rating driver.
Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.
Geen opmerkingen:
Een reactie posten