Singapore, November 18, 2016 -- Moody's Investors Service ("Moody's") has downgraded Mongolia's government long-term issuer and senior unsecured ratings to Caa1 from B3 and the senior unsecured MTN rating to (P)Caa1 from (P)B3 as well as affirming the NP short-term issuer rating. A stable outlook was assigned concluding the review for downgrade opened on 26 August 2016.
Moody's decision to downgrade Mongolia's issuer and bond ratings to Caa1, from B3, is driven by the following factors:
- Heightened uncertainty regarding the government's ability to meet its direct and indirect debt service obligations over the next two years and to shore up Mongolia's external liquidity
- Moody's expectation that the budget deficit will remain wider for longer than previously expected, which, combined with a weaker growth outlook in the coming 2 years, will raise the government's debt burden to elevated levels
The stable outlook reflects Moody's view that different factors potentially affecting Mongolia's credit profile are broadly balanced.
Moody's has today maintained the local-currency bond and deposit ceilings at Ba3. The long-term foreign currency deposit ceiling is revised to Caa2 from Caa1, while the foreign currency bond ceiling is also revised to B3 from B1. All short-term foreign currency ceilings remain at Not Prime. These ceilings act as a cap on ratings that can be assigned to the foreign- and local-currency obligations of entities domiciled in the country.
Singapore, November 18, 2016 -- Moody's Investors Service ("Moody's") has downgraded Mongolia's government long-term issuer and senior unsecured ratings to Caa1 from B3 and the senior unsecured MTN rating to (P)Caa1 from (P)B3 as well as affirming the NP short-term issuer rating. A stable outlook was assigned concluding the review for downgrade opened on 26 August 2016.
Moody's decision to downgrade Mongolia's issuer and bond ratings to Caa1, from B3, is driven by the following factors:
- Heightened uncertainty regarding the government's ability to meet its direct and indirect debt service obligations over the next two years and to shore up Mongolia's external liquidity
- Moody's expectation that the budget deficit will remain wider for longer than previously expected, which, combined with a weaker growth outlook in the coming 2 years, will raise the government's debt burden to elevated levels
The stable outlook reflects Moody's view that different factors potentially affecting Mongolia's credit profile are broadly balanced.
Moody's has today maintained the local-currency bond and deposit ceilings at Ba3. The long-term foreign currency deposit ceiling is revised to Caa2 from Caa1, while the foreign currency bond ceiling is also revised to B3 from B1. All short-term foreign currency ceilings remain at Not Prime. These ceilings act as a cap on ratings that can be assigned to the foreign- and local-currency obligations of entities domiciled in the country.