Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns first-time B2 issuer ratings to Government of the Kyrgyz Republic; stable outlook

 The document has been translated in other languages

09 Dec 2015

New York, December 09, 2015 -- Moody's Investors Service has today assigned first-time local- and foreign-currency issuer ratings of B2 to the Government of the Kyrgyz Republic. The ratings carry a stable outlook.

The rating assignment reflects the following considerations:

(1) The 'Low' strength of the Kyrgyz Republic's small but rapidly growing economy, given in particular its high dependence on gold mining and remittances from workers in Russia, and its vulnerability to variations in those income sources,

(2) The Republic's 'Very Low' institutional strength, reflecting very weak governance and institutional features, though Moody's has taken note of its strong data transparency,

(3) The Kyrgyz Government's 'Medium' fiscal strength, which balances a relatively high and rising debt burden and volatile fiscal balance against the high affordability of its debt load given its predominantly concessional nature, and

(4) The sovereign's 'Medium' susceptibility to event risks, given in particular the highly dollarized banking sector and, at least until recently, volatile political system.

Moody's has also assigned a Ba3 ceiling for local-currency bonds and deposits, a Ba3 ceiling for foreign-currency bonds and a B3 ceiling for foreign-currency deposits.

RATINGS RATIONALE

--'LOW' ECONOMIC STRENGTH: A SMALL AND OPEN ECONOMY, YET WITH RELATIVELY STRONG TRACK RECORD OF GROWTH

The first driver underlying Moody's assignment of a B2 sovereign rating for the Kyrgyz Republic is its assessment of 'low' economic strength. This is reflected in a number of key indicators, including (1) the economy's small size, with a nominal GDP of $7.4 billion; (2) its low per capita income, at $3,262 on a purchasing power parity basis; (3) the country's substantial reliance on trade with and remittances from Russia, the latter representing 30% of GDP, which create high exposure to slowdowns in Russia's economy; and (4) high reliance on volatile gold production, with output from one source - the Kumtor gold mine - representing 7.4% of GDP and 40% of exports. As a result of these features, growth has been volatile in recent years and is expected to remain so for some years to come.

Set against its small size and concentration, the Kyrgyz economy has experienced relatively high growth in recent years, averaging 4.8% since 2011. Growth is likely to be sustained, averaging 5.6% in 2015-2016, supported by the Public Investment Program and sound gold production prospects. It will be somewhat reduced over the near term as a result of the country's entry into the Eurasian Economic Union (EAEU) in May 2015, which is likely to slow non-gold growth this year as the country raises trade tariffs with other non-EAEU partners. Over the medium term, however, entry into the EAEU is likely to have a positive effect on growth, reflecting improved access to the Kazakh and Russian markets.

Over the coming years, growth will be supported by planned infrastructure investment, based on continued financing from bilateral and multilateral donors. At 27% of GDP, gross investment is already high relative to peers. Kyrgyz competitiveness is hindered by infrastructure bottlenecks, which are being addressed through the Public Investment Program, and foreign direct investments remain volatile.

--'VERY LOW' INSTITUTIONAL STRENGTH, ALTHOUGH TRANSPARENCY STANDS OUT

The second key driver of the Kyrgyz Republic's B2 sovereign rating is the country's 'very low' institutional strength. The Kyrgyz Republic scores very low in the World Governance Indicators, underperforming many B-rated peers, particularly with regard to corruption and the rule of law. The effectiveness of monetary policy - a useful proxy for the capacity of the country's institutions to articulate and achieve supportive policy objectives - is hampered by external vulnerabilities, including currency and commodity prices fluctuations, as reflected by the large depreciation in the Kyrgyz som this year.

Nonetheless, we note that there have been recent improvements in monetary policy, with more effective transmission channels related to financial deepening. Relations with the IMF and trade integration are supportive of the Kyrgyz Republic's institutional strength. A new, 3-year Extended Credit Facility (ECF) program approved in April 2015, as well as technical assistance help the country develop fiscal policy predictability. The scope and timeliness of data are strong relative to peers, as reflected by the country's participation in the IMF's Special Data Dissemination Standard (SDDS) since 2004, a sign of growing institutional maturity.

--'MEDIUM-' FISCAL STRENGTH, WITH RISING DEBT BURDEN SOMEWHAT BALANCED BY ACCESS TO AFFORDABLE CONCESSIONAL FINANCING

The third driver informing Moody's decision to assign a B2 rating to the Kyrgyz Republic is its 'medium-' fiscal strength. This reflects a relatively high and rising debt burden made affordable by a large concessional financing base. At 54% of GDP, the Kyrgyz Republic's debt load is high for a small, poor country and is set to rise in the next two years to finance infrastructure. As a result of the som's depreciation, we expect government external debt to breach its legal limit of 60% of GDP this year, while government domestic debt will remain very low.

Fiscal balances have been volatile, reflecting both fluctuations in government revenue stemming from the mining sector and large but uneven capital expenditures. General government fiscal deficits have averaged just under 4% over the past five years, slightly lower than the median for B-rated countries, partly reflecting high capital outlays relative to tax revenue. The fiscal deficit reached a small surplus in 2014, mainly driven by one-off revenue and a slowdown in investment. We expect the deficit to widen again in 2015 and 2016 to about 3% of GDP on the back of increased infrastructure spending.

Set against those weaker features, the Kyrgyz Republic continues to benefit from strong donor support, as reflected by large investments financed by China's Export-Import Bank and the recent set-up of the $1 billion Russia-Kyrgyz Investment Fund, of which $250 million has been disbursed. The existing debt stock is 93% held by non-resident multilateral and bilateral creditors, with a very long maturity and low interest payments. Debt-servicing costs are very low relative to peers, with interest payments amounting to only 2.4% of general government revenue in 2014.

The high affordability of the government's debt stock offsets somewhat the challenges posed now and in the future by the high debt load and its exposure to currency fluctuations. Meanwhile, the government retains flexibility resulting from the gradual decrease in current expenditures as a percentage of GDP. This may support the gradual reduction of debt over time, particularly should concessional debt begin to be replaced by market debt.

--'MEDIUM' EXPOSURE TO EVENT RISKS STEMMING FROM POLITICAL AND BANKING SECTOR

The fourth driver underpinning the B2 rating for the Kyrgyz Republic is Moody's assessment of the country's moderate susceptibility to event risk which is driven by political and banking sector risks.

The political arena has been troubled in recent years. Perception of poor and worsening governance led to the ousting of two presidents, in 2005 and 2010, polarizing society. While the most recent transition of power was relatively smooth, internal strife could reemerge over time. The Kyrgyz Republic's economic dependence on both Russia and China also increases the impact of regional tensions, which the entry into the EAEU could exacerbate.

The banking sector has seen high credit growth (albeit from a low level) and the level of dollarization is high and rising, with 65% of deposits and 51% of loans in dollars as of September, posing contingent liability risks for the government. Proposed improvements in the regulatory framework, including a new Banking Code, mitigate those risks.

A further source of event risks is the external payments position, which is weakened by persistently very large current account deficits, only partly funded by foreign direct investments. The country's net international investment position has deteriorated markedly in recent years to -79% of GDP, pointing to increased reliance on debt financing. This risk is mitigated by very low external debt service payments.

The indicative rating range resulting from the combination of the four factor scores is B1-B3.

RATING OUTLOOK

The stable outlook reflects Moody's assessment of Kyrgyz Republic's prospects for high economic growth and donor-funded infrastructure investment. The stable outlook is based on our expectation that government debt increases will be limited and the authorities will tackle external and banking sector vulnerabilities.

WHAT COULD CHANGE THE RATING -- UP/DOWN

Upward credit pressure could develop as a result of (1) growth-enhancing structural reforms combined with banking sector stability; (2) fiscal consolidation efforts that lead to a reduction in the government's debt burden; and (3) improvements in price and exchange rate stability that do not impair the country's external position.

Downward pressure would be exerted on the rating in the event of (1) the withdrawal of donor support, which would add to the government's borrowing costs; (2) large financing needs due to fiscal deficits combined with a substantial deterioration in debt structure; or (3) economically destabilizing political and social tensions.

GDP per capita (PPP basis, US$): 3,262 (2014 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 3.6% (2014 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 10.5% (2014 Actual)

Gen. Gov. Financial Balance/GDP: 0.2% (2014 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: -24.2% (2014 Actual) (also known as External Balance)

External debt/GDP: 108.0% (2014 Actual)

Level of economic development: Low level of economic resilience

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 11 August 2015, a rating committee was called to discuss the rating of the Kyrgyz Republic, Government of. The main points raised during the discussion were: the issuer's economic fundamentals, including its economic strength; institutional strength/ framework; fiscal or financial strength, including its debt profile and susceptibility to event risk. This rating level was also considered relative to its peers.

The principal methodology used in this rating was Sovereign Bond Ratings published in September 2013. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this rating action, if applicable.

The local market analyst for the Kyrgyz Republic's rating is Mathias Angonin; +971.4.237.9548

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Ernest Sergenti
Asst Vice President - Analyst
Sovereign Risk Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Anne Van Praagh
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns first-time B2 issuer ratings to Government of the Kyrgyz Republic; stable outlook
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.