Standard & Poor's Ratings Services revised its outlook on Belize to negative from stable, citing diminishing political incentives to service Belize's external debt.
The credit rater, which affirmed its B-minus/C sovereign long-term foreign currency credit ratings, noted rising crime, public-sector wage pressures and budget constraints may reduce political incentives to pay debt service.
S&P also pointed to Belize's external imbalances, weak political institutions and large general government debt burden, which constrain the rating at the B-minus level.
At the same time, it said external financing and a favorable external amortization profile for the medium term support the ratings.
S&P last downgraded Belize's ratings in early August after the heavily indebted country acquired a large stake in its distressed utility company.
A growing number of Belize's public-sector companies have exposed contingent liabilities in recent months, putting more pressure on the country's balance sheet. The Belizean government in June added a stake in Belize Electricity Ltd.
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356; [email protected]