Moody’s Investors Service Tuesday raised Colombia’s sovereign-debt rating into investment-grade territory, citing the country’s improving security picture and timely debt payments.
Violence caused by guerrilla soldiers and organized crime has waned in recent years, which has allowed for increased investment in the often violence-wracked country. Moody’s said it still expects Colombia to continue spending a large slice of its budget on defense to combat the threat, though it predicted the economy will benefit overall from improved security.
Moody’s now rates Colombia at Baa3, the lowest rung in investment-grade territory. Its outlook is stable.
The ratings agency also based its upgrade on Colombia’s long history of timely debt payments coupled with the government’s adept handling of internal and external economic shocks.
Booming commodities prices are expected to drive increased government revenue, though Moody’s didn’t base its overall ratings lift on the country’s debt ratios as much as on its overall macroeconomic future.
Moody’s in September placed Colombia’s then-speculative debt rating on watch for upgrade, citing the South American nation’s improved prospects for structural fiscal consolidation.
(Drew FitzGerald/Dow Jones)
