------------MUMBAI (Thomson Financial) - Moody's said it has assigned its first-ever foreign and local currency bond ratings of 'B2' to Cambodia with a stable outlook reflecting the nation's debt position and fiscal and balance-of-payments performance.
Understanding Moody's Bond Ratings
Rating "Ba"
Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
Rating "B"
Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments of of maintenance of other terms of the contract over any long period of time may be small.
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Moody's also assigned a foreign-currency bond ceiling of 'B1' to Cambodia reflecting the government's bond rating and its assessment of a high risk of payments moratorium in the event of a government bond default.
Other newly assigned ratings include a foreign-currency ceiling for bank deposits of 'B3'; a local-currency bond ceiling of 'Ba1' and a local-currency deposit ceiling of 'Ba1'. All short-term ratings and ceilings are not prime.
'Our ratings reflect the country's relatively high, but concessional, government and external debt, as well as recent, gradual improvement in fiscal and balance-of-payments performance,' said Moody's vice president Thomas Byrne.
'The ratings also take into account recent stability achieved in Cambodia's young, democratic political system since the 2003 elections,' said Byrne, adding that the very weak state of governance adversely affects Cambodia's credit fundamentals.
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