New York, April 01, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 29 March 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for these rated entities was Sovereign Ratings Methodology published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Sovereign Ratings Methodology
Economic Strength: The intrinsic strength of the economy provides critical indications of a sovereign's resilience to shocks. A sovereign's ability to generate sufficient revenue to service debt over the medium term relies on sustained economic growth and prosperity. Metrics may include but are not limited to growth dynamics as measured by the average rate and volatility of real GDP growth; diversity and complexity as proxied by the scale of nominal GDP; and the level of wealth expressed in GDP per capita.
Institutions and Governance Strength: The strength of institutions and governance provide a strong indication of a government's willingness to repay its debt. They influence the sovereign's capacity and willingness to formulate and implement economic, fiscal, and monetary policies that support growth, socio-economic stability, and fiscal sustainability, which in turn protect the interests of creditors over the long term. Moody's assessment may include but is not limited to: the quality of legislative and executive institutions; the strength of civil society and the judiciary; fiscal policy effectiveness; and monetary and macroeconomic policy effectiveness.
Fiscal Strength: A sovereign's fiscal strength is a direct indicator of the sustainability of the sovereign's debt burden. Persistent fiscal imbalances often result in elevated leverage and deteriorating debt affordability, ultimately making the sovereign more vulnerable to financial shocks and the risk of not being able to meet its obligations. Metrics may include but are not limited to the level of general government debt relative to GDP and general government revenue, as well as general government interest payments relative to GDP and general government revenue.
Susceptibility to Event Risk: Susceptibility to sudden, extreme events that could severely impact the country's economy or its institutions, or strain public finances is an important indicator of a sovereign's creditworthiness. Event risks are varied and typically include domestic political and geopolitical risks, government liquidity risk, banking sector risk and external vulnerability risk.
Other Rating Considerations: Ratings may consider additional factors whose credit importance varies widely among the issuers in the sector or because the factors may be important only under certain circumstances or for a subset of issuers. Such factors include our assessments of environmental and social considerations. Regulatory, litigation, liquidity, technology, and reputational risk can also affect ratings.
• Albania, Government of
• Andorra, Government of
• Austria, Government of
• Belarus, Government of
• Belgium, Government of
• Bosnia and Herzegovina, Government of
• Bulgaria, Government of
• Croatia, Government of
• Cyprus, Government of
• Czech Republic, Government of
• Denmark, Government of
• Estonia, Government of
• Finland, Government of
• France, Government of
• Germany, Government of
• Greece, Government of
• Hungary, Government of
• Iceland, Government of
• Ireland, Government of
• Isle of Man, Government of
• Israel, Government of
• Italy, Government of
• Latvia, Government of
• Lithuania, Government of
• Luxembourg, Government of
• Malta, Government of
• Moldova, Government of
• Montenegro, Government of
• Netherlands, Government of
• Norway, Government of
• Poland, Government of
• Portugal, Government of
• Romania, Government of
• Serbia, Government of
• Slovakia, Government of
• Slovenia, Government of
• Spain, Government of
• Sweden, Government of
• Switzerland, Government of
• Turkey, Government of
• Ukraine, Government of
• United Kingdom, Government of
The principal methodology used for these rated entities was Multilateral Development Banks and Other Supranational Entities Methodology published in October 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Multilateral Development Banks and Other Supranational Entities Methodology
Capital Adequacy: Capital adequacy is a critical indicator of the capacity of a multilateral development bank (MDB) to absorb credit or market losses stemming from its operations and hence its ability to repay debtholders. Because of their mandate, MDBs typically lend to, or invest in, risky sectors or regions where financing from the private sector is scarce, which makes capital buffers extremely important. An MDB's ability to replenish an eroded capital base through earning is typically limited by the institution's mandate. Metrics may include but are not limited to leverage as measured by the ratio of assets to useable equity, development asset credit quality, and the ratio of non-performing development assets to total development assets.
Liquidity and Funding: A supranational institution's liquidity at hand and the ability to access credit markets are important indicators of its ability to meet its obligations, especially as MDBs tend not to have stable deposits (with a limited number of exceptions), and most do not have access to the liquidity facilities that central banks provide to commercial banks. The availability of liquid resources assesses the composition and size of a supranational institution's liquid assets relative to estimated net cash outflows in the 18 months following the most recently reported period. The quality and structure of funding reflects the track record of bond issuance, the cost of funding relative to peers, the availability of credit lines and the diversity of funding sources and the investor base.
Qualitative Adjustment Factors: In addition to the assessments of Capital Adequacy and Liquidity and Funding, which together determine the preliminary intrinsic financial strength, we incorporate considerations related to an MDBs operating environment and its quality of management, although such adjustments are applied relatively infrequently.
Strength of Member Support: Expectation of member support, beyond the ongoing involvement of members already captured in the assessments for capital adequacy and liquidity and funding, is a defining characteristic of the MDB sector, given that the members set up the institution specifically to further their developmental or other objectives. Strength of member support is essentially driven by the ability of members to provide support and their willingness to support the institution. Metrics may include but are not limited to the weighted average shareholder rating and the ratio of callable capital to total (gross) debt, as well as qualitative considerations related to the track record of general capital increases and the strategic, economic, and financial importance of the MDB for its shareholders.
Other supranational entities: Other supranational entities differ from MDBs in having little or no capital to support ongoing operations, as their structures rely heavily on member support. They have less capacity to function independently from their members or to maintain significant financial buffers that could absorb shocks and mitigate risks. Consequently, their credit profile is largely based on the strength of member support and an assessment of liquidity and funding, further calibrated by qualitative considerations related to the operating environment and quality of management.
Other Rating Considerations: Ratings may consider additional factors whose credit importance varies widely among the issuers in the sector or because the factors may be important only under certain circumstances or for a subset of issuers. Such factors include financial controls, the quality of financial reporting, and assessments of environmental and social considerations. Regulatory, litigation, liquidity, technology, and reputational risk, as well as changes to demand patterns, can also affect ratings.
• EFSF (European Financial Stability Facility)
• European Stability Mechanism (ESM)
• European Union
The principal methodology used for these rated entities was Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts published in May 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts
Third-party credit support: The goal of third-party credit support is to substitute the credit risk of the support provider for the credit risk of the issuer. For credit substitution to be achieved, investors must be insulated from the risk of payment default by the underlying obligor. Generally, the long-term ratings on credit-supported transactions track the long-term rating assigned to the credit provider.
Additional Considerations: Credit substitution requires more than just the presence of a credit support instrument from a third-party credit provider. The transaction documentation provides clear instructions to ensure that payments under the credit support facility are made when due and that there are no impediments to the timely payment of debt service. The key elements evaluated include: mitigation of bankruptcy risk of issuer; sufficiency of credit support; structural provisions which provide for the timely payment of debt service; bondholders to be paid in full if credit support expiration or termination will result in a change.
• Saltaire Finance plc
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on www.moodys.com, for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
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