비트겟 El Salvador Downgraded to Junk
비트겟 Fitch Ratings downgraded El Salvador’s Long Term Foreign Currency Issuer Default Rating (IDR) from “B-” to “CCC” Wednesday. The American credit rating agency is one of the Big Three credit rating agencies. The other two are Moody’s and Standard & Poor’s (S&P).
For Fitch, bonds rated AAA, AA, A, or BBB are considered investment grade, while those rated BB, B, CCC, CC, C, or D are considered speculative, or junk grade, bonds. The company explained that CCC ratings mean “Substantial credit risk” with “Very low margin for safety,” and that “Default is a real possibility.”
In Fitch’s view, weakening of institutions and concentration of power in the presidency have increased policy unpredictability, and the adoption of bitcoin as legal tender has added uncertainty about the potential for an IMF program that would unlock financing for 2022-2023.