Bond rating deteriorates due to more risk

Bond rating deteriorates due to more risk

Page Seven / La Paz

The risk ratings of Bolivia’s sovereign bonds deteriorate compared to the issues made until 2017 and went from BB to B because the country is seen as having greater weakness and risk to invest, experts point out.

The company Fitch Ratings assigned a rating of “B” to the bonds issued by Bolivia, for 850 million dollars, maturing on March 2, 2030. “Fitch Ratings assigned a rating of B to the Bolivian bonds for 850 million dollars dollars due March 2, 2030. The notes have a 7.5% coupon. The proceeds from this issue are being used for general budget purposes and a concurrent liability management operation that involves the repurchase of existing bonds”, states the report published by the international rating agency.

Analyst Alberto Bonadona said that with this B rating a signal is given that it is not advisable to invest in these titles due to the risk.

“This B rating is considered for bonds that have a high risk and probability of losing the investment. That is why the more the risk rises, the interest rate rises, and in this case it was set at 7.5%”, the analyst specified.

Financial analyst Jaime Dunn explained that the current B rating is lower than the double B (BB) that the country had when it issued its bonds years ago.

“This means that there was a deterioration in Bolivia’s credit rating, which began in 2016 and has since been adjusted until reaching B,” he said.

The economic analyst added that this implies a weak, speculative and high-risk investment.

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