S&P lowers Venezuela currency to B+

Standard & Poor's said it lowered the long-term foreign- and local-currency sovereign credit ratings on the Bolivarian Republic of Venezuela to B+ from BB-.

The agency also said it revised the transfer and convertibility assessment to B+ and affirmed its B short-term foreign- and local-currency sovereign credit ratings.

The outlook is stable.

The downgrade follows the implementation of S&P's revised methodology and assumptions for sovereign ratings. The recently revised methodology assigns heavier weight to political risk, which is a credit weakness for Venezuela, the agency said.

The country's ratings are constrained by political factors and are supported by the sovereign's modest external and fiscal positions, S&P said.

Changing and arbitrary laws, price and exchange controls and other distorting and unpredictable economic measures have undermined private-sector investment and hurt productivity, weakening Venezuela's domestic economy, the agency said.

Furthermore, the recent developments regarding President Hugo Chavez's health could add to policy uncertainty, S&P said.

The country's vast oil and gas reserves, which are key positives in external and fiscal performance, somewhat offset the policy uncertainty, the agency added.

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