bia06
Listen other's viewpoint avoid conflicts & wars.
C'e' solo questa obbligaz. o sbaglio ? XS0264206367
Grazie
Grazie
Related Issuers
Nicaragua, Government of
Related Research
Credit Opinion: Government of Nicaragua – B2 Stable: Update following outlook change to stable
Country Statistics: Nicaragua, Government of
Announcement: Moody's: Credit profiles of small, agriculture-reliant sovereigns most susceptible to climate change risk
Announcement: Moody's: Stable outlook for Latin America and Caribbean sovereigns as stronger growth balances rising debt and policy uncertainty
Outlook: Sovereigns – Latin America & Caribbean: 2018 outlook stable as growth momentum offsets rising debt and policy uncertainty
Rating Action:
Moody's changes Nicaragua's rating outlook to stable from positive; B2 rating affirmed
13 Jun 2018
New York, June 13, 2018 -- Moody's Investors Service ("Moody's") has today changed Nicaragua's rating outlook to stable from positive and affirmed its B2 long-term issuer ratings.
In Moody's view, the factors that supported its July 2017 decision to assign a positive outlook on Nicaragua's rating have dissipated following what it believes is a marked weakening of the country's consensus-building institutions following recent episodes of social unrest triggered by the government's attempt to reform its pension system.
The country's increasingly established track record of consensus-building policymaking and the planned pension reforms for this year were the two key drivers supporting the positive outlook. Now, however, the shifting political and institutional landscape has increased uncertainty regarding policy direction; and, related to that, likely delays in pension reforms point to budgetary outcomes potentially weaker than the rating agency had previously assumed.
The affirmation of the B2 rating reflects credit strengths including the country's strong medium-term potential growth as well as debt and interest burdens that are lower than peers. These strengths balance the credit challenges posed by low per capita income, institutional shortcomings, and a high share of foreign currency-denominated government debt, although this external debt is mainly owed to multilateral creditors and has a very long maturity profile.
Nicaragua's foreign and domestic currency bond and deposit ceilings were unaffected by today's outlook change. The long-term foreign currency bond and bank deposit ceilings remain at B1 and B3, respectively. The short-term foreign-currency bond and deposit ceilings remain at NP. The long-term local-currency bond and bank deposit ceilings remain at Ba3.
RATINGS RATIONALE
RATIONALE FOR CHANGE IN OUTLOOK TO STABLE FROM POSITIVE
BREAKDOWN OF NICARAGUA'S CONSENSUS-BUILDING POLICYMAKING MODEL
Over the past decade, Nicaragua's consensus-building policymaking model bringing together government, business, labor and other key institutions in a cooperative framework emerged as an important supportive feature of the country's credit profile, providing macroeconomic policy predictability. The presence of a prudent and predictable policy framework with strong support from the private sector has contributed positively to economic growth, a condition that made Nicaragua attractive to investment in general, and foreign direct investment in particular, relative to some other Central American countries. Moody's decision to assign a positive outlook last year reflected the longer-term economic and fiscal benefits likely to be derived from the strengthening institutional framework.
Recently, however, social protests triggered by a pension reform unilaterally introduced by the government in April -- which was subsequently reversed -- have significantly weakened this consensus-building institutional setting. Attempts to maintain a national dialogue have proven unsuccessful and increased tensions between the government and all other sectors of society are evident. So far, there is no indication that a constructive dialogue will emerge as the positions of various social groups have become more polarized. While a resolution of this political and social unrest could surface in the coming months, it is becoming increasingly likely that the country's consensus-building model has been permanently weakened, reducing the effectiveness and predictability of policy.
