S&P rates Empresa Electrica de Guatemala

Standard & Poor's said it assigned its BB- foreign currency corporate credit rating and BB local currency corporate credit rating to Empresa Electrica de Guatemala SA.

The outlook is stable.

S&P said the ratings reflect a limited ability to achieve higher demand growth rates due to limited economic growth, which derives from a still highly polarized society and a divided Congress, which S&P expects will continue to prevent significant advances in economic reform. The ratings also reflect the company's limited financial flexibility given the undeveloped capital markets in Guatemala, compared to distribution companies operating in countries with more developed financial markets; a certain amount of uncertainty in operating in a competitive market for electricity in a country that, while stable currently, has experienced periods of economic instability in the past; and an untested regulation during an economic crisis.

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