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BBH: Frontier Sovereign Rating Model for Q1 2018

BBH produced the following ratings model to assess relative sovereign risk in Frontier Markets. A country’s score directly reflects its creditworthiness and underlying ability to service its external debt obligations.

Russia: Western Banks in Wait-and-See Mode Amid Consolidation, Sanctions Risk

Over the past three years, the Central Bank of Russia has done an impressive job of staving off financial crisis while continuing to consolidate the country’s bloated banking sector. But as the state’s share in the sector approaches 70%, questions are being asked about the sustainability of its approach and the risks for private lenders, particularly those headquartered abroad.

The Spectre of Communism Haunts Vietnam’s Credit Market Despite Solid Growth

Vietnam has become one of the most stable and high-performing economies in Asia over the past decade, providing a cheaper alternative for global production and manufacturing giants to the resurgent China. As the country looks to develop and further open its capital markets, unsustainable credit growth and the burden of funding the Party machine could bring a dark twist to this tale of prosperity.

Paraguay is the new Star in the Mercosur

I have covered Paraguay since 2004, when I was working for Merrill Lynch. At that time, to open a relationship in Paraguay and get all approvals from compliance was a nightmare. The ROI was amazing, but the headache given by the account was three times greater than any other country in the region, too. Since 2003, however, Paraguay changed a lot.

ACRA, Russia’s Credit Rating Revolution, and Red Herring Reform

Many foreign credit rating agencies – the Big Three in particular – balked when the Russian government tightened controls on the regulation of credit rating agencies, a move intended to bring more transparency to the sector and eliminate conflicts of interest. Borrowers, analysts and investors are sceptical about the rules’ ability to deliver on its stated goals.

Can South Africa Get its Fiscal Groove Back?

With real GDP growth at near zero and fiscal projects trending downward, it’s unsurprising Standard & Poor’s didn’t wait for the ANC leadership contest in late 2017, or the next budget release, to cut the country’s credit rating to junk. The real question now is: how quickly can the country reverse course?

Latin America Credit Markets Brief: 9 November – 23 November

Brazil to buy back USD1.82bn of sovereign bonds – Pemex issued a GBP450mn bond – Petrobras inked a USD1bn secured loan – Chile holds rates – Electricidad de Caracas defaulted in a 2018 bond – Venezuela gets downgraded to ‘SD’ – Venezulean authorities arrested top Citgo executives – Entre Rios tapped the international markets with a USD150mn

Middle East Credit Markets Brief: 09 November – 22 November

Kingdom Holdings halts borrowing plans – Citigroup will begin operations in KSA in early 2018 – London Court rules in favour of Dana’s bondholders – ADNOC secures USD6bn dual-tranche loan – Mazoon Electric Company issues a USD500mn sukuk – Lebanon carries out a debt swap – CIB to increase Tier 2 capital

Emerging Markets’ Greatest Bond Villain: Venezuela Enters Record-Breaking Default

In one of the strangest debt crises in recent history, a defiant president Maduro vowed to continue servicing Venezuela’s debt as global ratings and debt settlement agencies declared the sovereign and state-oil giant PDVSA in default. How long can the charade continue?

Russia, CIS, Europe & Turkey Credit Markets Brief: 02 November – 16 November

Petropavlovsk sold USD500mn of fresh debt –– PSB gets downgraded – Rosneft’s shares take a hit due to Venezuelan crisis – Venezuela and Russia agree on debt restructuring –ABLV placed USD40mn of unsubordinated notes – Belarus to issue USD600mn next year – The government to support Turkey’s export sector

 

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