On May 24, 2016, Moody's Investors Service ("Moody's") upgraded Honduras' government bond ratings to B2 from B3. Concurrently, it has upgraded the foreign and local currency issuer and senior unsecured ratings to B2 from B3.

"Moody's decision to upgrade Honduras' ratings to B2 reflects the following key drivers: (1) Honduras' fiscal profile has improved significantly, with central administration deficit decreasing to 3.1% of GDP in 2015 from 7.9% in 2013, and debt-to-GDP expected to plateau this year at around 46% of GDP. (2) The authorities have implemented institutional enhancements that have resulted in an increase in the discipline of budget processes, more effective control on the government expenditures and improvement in the tax administration" according to Moodys Investors Service.

In accordance with the Honduras President Juan Orlando Hernandez, this new rating established by Moodys evidences trust in our country and government, and will allow financing for health and education programs required in the country. This is the highest rating that Honduras has received in all of its history. Furthermore, the President urged the financial system to lower its interest rates since these new ratings will benefit their financial operations.

In conclusion, Moody's is confident in a likely continuation of progress in 2016-17, expecting compliance fiscal targets and steady improvement in government debt affordability, as well as signals that the prudent fiscal policy will continue in the next administration.