S&P drops Papua New Guinea view to negative

Standard & Poor's said it revised the outlook on the long-term sovereign credit rating on Papua New Guinea to negative from stable. At the same time, the agency said it affirmed its B+ local and foreign currency long-term rating and B short-term rating.

The transfer and convertibility assessment remains BB.

S&P said the outlook change reflects the weakened political settings in Papua New Guniea.

"The political instability centers on both Michael Somare and Peter O'Neill claiming the position of prime minister following O'Neill's election to the position in August 2011 by the PNG parliament during Somare's absence on medical grounds," S&P credit analyst Kyran Curry said in a news release.

According to S&P, the political conflict has increased the risks of the country losing donor support and much needed investments.

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