S&P expects more sub-investment grade sovereign issuance

Standard & Poor’s (S&P) expects a growing number of emerging market sovereigns to request ratings in the near term. This follows new ratings assigned to Georgia (B+), Sri Lanka (B+) and Nigeria (BB-).

"BB-rated sovereigns are a rapidly rising category. This reflects both the greater interest investors are showing towards sovereigns that until now have not been rated and the recognition by governments of having a credit rating, even if it is not as high as they would like,” said David Beers, global head of sovereign ratings in London.

Of the 110 sovereigns it covers, S&P has placed 19 on positive outlook (including new and prospective European Union members, and Brazil and China) and seven on negative outlook. Most notably, Italy continues to be on negative outlook, joining the ranks of countries such as Belize, Bolivia, Hungary and the Philippines, all of which face significant structural hurdles.

Overall, S&P expects total global government issuance to total $5.6 trillion in 2006, level with 2005. Of this, sovereign issuance is expected to fall 1% to $4.6 trillion, while local and regional government issuance is expected to rise 1.5% to $0.9 trillion.

Regionally, the US and Japan will be the top sovereign borrowers this year with just under $1.5 trillion each, with the level of borrowing in the US rising and that of Japan falling. Meanwhile, Eurozone issuance is expected to rise 2% to €0.7 trillion and emerging market issuance should fall by around 7% to $0.6 billion.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here