Fitch lowers El Salvador

Fitch Ratings said it downgraded El Salvador's long-term local-currency issuer default rating to RD (restricted default) from B.

The agency also said it downgraded El Salvador's long-term foreign-currency issuer default rating to CCC from B.

El Salvador's senior unsecured foreign-currency bonds also were downgraded to CCC from B.

The country ceiling is downgraded to B- from BB- and the short-term local- and foreign-currency issuer default rating are downgraded to C from B.

The downgrades reflect that the government failed to make interest payments on debt to the local private pension funds issued under domestic law, Fitch said.

The agency said it therefore judges El Salvador to be in default on its sovereign obligations.

This credit event follows a period of heightened political polarization in El Salvador, resulting in a prolonged period of congressional gridlock, Fitch said.

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