Free Trial

JPMorgan Views On The Downgrade

COLOMBIA
  • While the earlier timing and that S&P moved first came as a surprise, the rationale less so. Markets may be on the back foot as S&P had reaffirmed the ratings less than a month ago, leading some to think that Colombia was out of the woods from the agency for now.
  • Some mitigating factors such as a solid economic recovery, institutional strengths and continued efforts at a gradual fiscal consolidation likely underpinned the stable outlook
  • Yet, they think that 'big picture' S&P focused more on the likelihood that the political/social backdrop and building spending pressures would yield the size of adjustment needed to stabilize debt over the coming years, and came up short, rather than the exact decimal points and details of the revenue measures of the fiscal package being debated.
  • It is highly likely that Fitch will choose to join them once the fate of the fiscal package is clarified, probably in 3Q, becoming the second agency to rate Colombia sub-investment grade

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.