El Salvador downgraded after missing payments

Ratings agency S&P has downgraded El Salvador’s sovereign credit rating to “selective default” after the government missed payments related to its pension debts.

The government missed $28.8 milliom worth of payments due between April 7 and April 10 after the country’s Congress failed to approve a budgetary allocation to cover the payments. Assuming a solution is not found, the total owed is set to rise to $55.2 million by the end of this month.

An SD rating means S&P believes the state has chosen to default on a specific issue, but “will continue to meet its payment obligations on other issues or classes of obligations”.

Source: Financial Times