Moody's trims Chile ratings

Moody's Investors Service said it downgraded the government of Chile's long-term local- and foreign-currency issuer and senior unsecured ratings to A2 from A1, and the senior unsecured foreign-currency long-term shelf rating to (P)A2 from (P)A1. The outlook has been changed to stable from negative.

“The rating downgrade was driven by fiscal and economic trends that have gradually but persistently weakened Chile's credit profile, aligning it with that of A2-rated peers. Although the country entered the coronavirus crisis with lower debt than peers and with fiscal buffers, its debt burden had been rising steadily before the crisis and the pandemic exacerbated the upward trend,” Moody’s said in a press release.

The stable outlook reflects an expectation the country’s credit profile will stay aligned with that of A2-rated sovereigns, supported by strong institutions and policymaking, the agency said.

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