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MOODY'S ASSIGNS BA2 RATING TO ARMENIA'S BONDS
September 27, 2013 | 16:52
Moody's has today assigned a rating of Ba2 to the Armenian government's
700 million US$-denominated notes due 2020. The notes will bear
interest at a rate of 6% per annum. The rating is derived from
Armenia's Ba2 government bond rating with stable outlook, says the
statement issued by the agency.
Moody's notes that Armenia's rating is supported by its prudent fiscal
policy, which is reflected in recent deficit reduction from 7.5%
in 2009 to 1.5% in 2012, in part achieved by under-realised capital
expenditure and gradual revenue-mobilization.
The latter is underpinned by tax reform to broaden the tax base and
the introduction of a funded multi-pillar pension system from 2014
onwards. Other credit positive factors include the favourable cost
of funding due to borrowings from official lenders.
At the same time, Armenia's Ba2 rating is constrained by the economy's
small size and its reliance on commodity exports and on remittances,
mainly from Russia. In this regard, Armenia's already high economic and
financial exposure to Russia is set to intensify within the Customs
Union of Russia, Belarus and Kazakhstan as opposed to the previously
considered EU Deep and Comprehensive Free Trade Area (DCFTA). Moreover,
the country's limited tax take and relatively high corruption rank
also represent credit challenges.
In August Moody's revised its sovereign credit outlook for Armenia
changing it to stable from negative, but later changed Armenia's
foreign-currency bond ceiling to Ba1 from Baa3.
News from Armenia - NEWS.am
September 27, 2013 | 16:52
Moody's has today assigned a rating of Ba2 to the Armenian government's
700 million US$-denominated notes due 2020. The notes will bear
interest at a rate of 6% per annum. The rating is derived from
Armenia's Ba2 government bond rating with stable outlook, says the
statement issued by the agency.
Moody's notes that Armenia's rating is supported by its prudent fiscal
policy, which is reflected in recent deficit reduction from 7.5%
in 2009 to 1.5% in 2012, in part achieved by under-realised capital
expenditure and gradual revenue-mobilization.
The latter is underpinned by tax reform to broaden the tax base and
the introduction of a funded multi-pillar pension system from 2014
onwards. Other credit positive factors include the favourable cost
of funding due to borrowings from official lenders.
At the same time, Armenia's Ba2 rating is constrained by the economy's
small size and its reliance on commodity exports and on remittances,
mainly from Russia. In this regard, Armenia's already high economic and
financial exposure to Russia is set to intensify within the Customs
Union of Russia, Belarus and Kazakhstan as opposed to the previously
considered EU Deep and Comprehensive Free Trade Area (DCFTA). Moreover,
the country's limited tax take and relatively high corruption rank
also represent credit challenges.
In August Moody's revised its sovereign credit outlook for Armenia
changing it to stable from negative, but later changed Armenia's
foreign-currency bond ceiling to Ba1 from Baa3.
News from Armenia - NEWS.am