Latest news with #creditRating
Bloomberg
07-07-2025
- Business
- Bloomberg
Japan's R&I Helps Hong Kong Funds by Reaffirming Top US Credit Rating
For Hong Kong's pension fund managers fretting over the risk of forced divestments of US Treasuries, Japan's Rating and Investment Information Inc. has some words of reassurance. The rating company, called R&I for short, re-affirmed that it will stick with its triple-A credit rating for the US, even though the three major global agencies have downgraded the debt, and as concerns mount that President Donald Trump's fiscal package inflates the government deficit.
Yahoo
30-06-2025
- Business
- Yahoo
Best's Special Report: Best's Impairment Rate and Rating Transition Study — 1977 to 2024
OLDWICK, N.J., June 30, 2025--(BUSINESS WIRE)--AM Best's latest special report on the long-term impairment rates of U.S.-domiciled insurance companies states that no insurers rated by AM Best became impaired in 2024. The Best's Special Report, titled, "Best's Impairment Rate and Rating Transition Study — 1977 to 2024," covers 47 one-year periods from Dec. 31, 1977, to Dec. 31, 2024, and the term impairments refers to insurers that became impaired and had a Best's Financial Strength Rating or Long-Term Issuer Credit Rating at the time of impairment. AM Best designates an insurer as a financially impaired company upon the public placement of the company, via public court order or other international equivalent, into conservation, rehabilitation and/or insolvent liquidation. The report also notes that the increase in frequency and severity of catastrophe events, especially secondary perils, clearly has pressured more insurers in recent years. In the most recent five-year period through 2024, 20 companies became impaired due to natural catastrophes; 14 were domiciled in Florida or Louisiana. To access a copy of this report, please visit AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts Emmanuel Modu Managing Director, Insurance-Linked Securities +1 908 882 2128 Wai Tang Senior Director, Insurance-Linked Securities +1 908 882 2388 David Mautone Senior Quantitative Specialist, Insurance-Linked Securities +1 908 882 2098 Christopher Sharkey Associate Director, Public Relations +1 908 439 2200, ext. Al Slavin Senior Public Relations Specialist+1 908 439 2200, ext. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Arab News
24-06-2025
- Business
- Arab News
Fitch affirms Abu Dhabi at ‘AA' with stable outlook as fiscal strength, surpluses endure
RIYADH: Abu Dhabi's long-term foreign-currency rating has been affirmed at 'AA' with a stable outlook by Fitch, supported by the emirate's robust fiscal surpluses, vast sovereign assets, and low debt levels. The US-based rating agency cited Abu Dhabi's strong balance sheet, supported by large sovereign assets and steady budget surpluses, but noted constraints such as hydrocarbon reliance, a still-developing policy framework, and weaker governance compared to peers. This follows S&P Global's recent assignment of a 'AA/A‑1+' with a stable outlook for its foreign and local currency sovereign credit ratings to the UAE, citing the country's strong fiscal and external positions. The agency also noted that the UAE's sizable asset cushion would help shield it from oil price volatility and regional geopolitical tensions. Despite these structural limitations, Abu Dhabi's fiscal position remains one of the strongest among Fitch-rated sovereigns. At the end of 2024, government debt stood at 17.4 percent of gross domestic product, well below the peer median of 48.8 percent, and is expected to rise only marginally to 18.2 percent by 2026 due to local currency issuance aimed at supporting domestic debt market development. In its latest report, Fitch stated: 'We project a budget surplus of 7.0 percent of GDP in 2025 (3.1 percent excluding investment income) based on Fitch's oil price (Brent USD65/b) and production (3.2m b/d) forecasts, and some spending under-execution, down from 9.9 percent in 2024. It added: 'For 2026, higher oil production, modest spending growth and the start of corporate income tax receipts will widen the surplus to 8 percent (4.3 percent excluding investment income).' The report noted that Abu Dhabi's fiscal breakeven oil price is estimated at $42.60 per barrel in 2025, or $54.30 excluding investment income, highlighting the emirate's resilience to oil market fluctuations. If oil prices decline, the government can maintain economic stability by adjusting spending or drawing on dividends from Abu Dhabi National Oil Co. According to Fitch, sovereign net foreign assets are projected to reach 255 percent of GDP by the end of 2024, with a substantial portion of surpluses allocated to government-related entities such as Abu Dhabi Developmental Holding Co. and Mubadala. Some funds are also expected to support MGX, a joint venture focused on artificial intelligence investments. Fitch added that contingent liabilities stemming from government-related entities debt, estimated at 48.3 percent of GDP in 2023, remain manageable given their asset bases, profitability, and the state's fiscal strength. Borrowing by government-related entities is anticipated to rise gradually as Abu Dhabi accelerates investment in non-oil sectors. The agency also highlighted strong non-oil growth, which reached 6.2 percent in 2024. Overall GDP growth stood at 3.8 percent last year, tempered by lower oil output in line with OPEC+ quotas. Fitch forecasts headline growth to rise to 6.3 percent in 2025 and 4 percent in 2026, driven by easing oil production constraints and increasing population levels. The ratings agency warned that elevated geopolitical risks, particularly regional tensions involving Iran, Israel, and the US, pose a downside risk. 'A regional conflagration would pose a risk to Abu Dhabi's hydrocarbon infrastructure and to Dubai as a trade, tourism and financial hub. Gulf maritime trade is a vital interest of the UAE,' the report said, though it added that the emirate's large reserves provide protection against short-term disruptions. Fitch's sovereign rating model assigned Abu Dhabi a score equivalent to 'AA+.' However, the agency applied a negative qualitative adjustment of one notch due to the emirate's high dependence on oil revenues and geopolitical vulnerability. The UAE's country ceiling was affirmed at 'AA+,' two notches above the sovereign rating, supported by strong constraints against capital controls, a dollarized financial system, and ample external buffers. The agency stated that a downgrade could be triggered by a significant erosion of fiscal and external positions or a geopolitical shock that undermines macroeconomic stability. Conversely, an upgrade would require structural improvements such as reduced oil dependence and enhanced governance metrics.
Zawya
23-06-2025
- Business
- Zawya
Attractive investment environment stimulates growth in Oman
The Sultanate of Oman's ongoing efforts to enhance its financial and economic position by managing its financial commitments and by reducing its public debt, have led to a steady improvement in its credit ratings and have improved investor confidence in the Omani economy. Consequently, these positive indicators have also created an attractive investment environment that stimulates growth across various economic sectors in the country. Oman's economy has achieved a surplus of RO 540 million against the budgeted deficit of RO 640 million for the financial year 2024 and the GDP at constant prices rose by 1.7%, to reach RO 38.305 billion in 2024 compared to 2024. Further, Oman has reduced its public debt by RO 660 million which stood at RO 14.6 billion by the end of 2024 compared to the previous year. Percentage wise the external debt of the Sultanate of Oman is 38% of the GDP which is far below, compared to our GCC neighbors Bahrain which is estimated at 134% of the GDP at the end of 2024 followed by Qatar at 41% and Kuwait at 39% (2023). UAE with 32% and Saudi Arabia with 25 % (2023) are closely behind. In line with Oman's progress, the credit rating agencies have given a positive outlook for the Sultanate which is quite encouraging and promising. By the end of September 2024, S&P had upgraded Oman's credit rating from 'BB+' to 'BBB-', thus restoring its investment-grade status after years of downgrades due to the financial crisis associated with falling oil prices and the Covid-19 pandemic. Similarly other credit rating agencies like Fitch and Moody's had also revised Oman's outlook from stable to positive. It is very important to understand that a credit rating of BBB- is better than BB+. BBB- is considered investment grade, while BB+ is considered non-investment grade or speculative grade. Generally, higher ratings indicate a lower risk of default and a greater capacity to meet the country's financial obligations. Factors affecting credit ratings vary for governments, corporate bonds, including economic conditions, political stability, industry dynamics, and company-specific factors. Oman is proud of this evolving economic landscape and is at the same time remain mindful of the global challenges, including ongoing geopolitical tensions and trade disruptions which are quite unfortunate. But we recognize the unique opportunities they present for the Sultanate. As we move forward let's hope to regain the peace and harmony that existed amongst our brothers which had been the hallmark of the flourishing communities in the Middle East. Let us continue to lead with purpose, serve with integrity, and build with the same spirit that has carried the people of Oman throughout the ages.
Arab News
21-06-2025
- Business
- Arab News
An African credit rating agency? Easier said than done
Africa's sovereign debt crisis is not merely a story of fiscal mismanagement or external shocks. It is amplified by a systemic anomaly: The continent pays more to borrow than its peers with comparable economic indicators. This penalty, often termed the 'African premium,' costs the region an estimated $24 billion annually in excess interest payments, and has deprived it of more than $46 billion in potential lending. With 20 low-income African nations in or near debt distress, and 94 percent of rated African sovereigns downgraded over the past decade, the search for solutions appears to be culminating in the establishment of an African Credit Rating Agency, or AfCRA for short. For now, the move is being framed as both a corrective measure and a symbol of financial sovereignty. Yet while politically sound, it faces profound operational and philosophical challenges. Even if the ambition to establish the agency is framed as a bold act of sovereignty, the terrain it seeks to conquer is littered with the wreckage of similar aspirations in richer, better-equipped regions. Granted, the financial logic behind the move is well-established: Africa's sovereign debt is routinely mispriced, with subjective and often opaque assessments by the 'Big Three' credit rating agencies — Moody's, Fitch and S&P — inflating risk perception and pushing average borrowing costs ever higher. As a result, total annual lending losses and excess interest payments exceed annual official development aid to the continent. That Africa is being 'penalized' beyond its macroeconomic fundamentals is no longer a niche theory among a few experts, policymakers or scholars at poorly attended conferences, it is a measurable economic hemorrhage. But attempting to correct this through AfCRA introduces a dilemma. Can a continent hobbled by thin capital markets, erratic fiscal transparency, and a fragmented political economy build a ratings agency that would be perceived as credible by the very investors it seeks to court? The evidence so far is not encouraging. Europe, despite its institutional depth and capital abundance, has failed to create a viable alternative to the Big Three, even after sinking more than €300 million ($346 million) into various experiments, all of which ended in regulatory quagmires or strategic surrender. The most successful nonaligned agencies, such as Scope in Europe or Morningstar DBRS in Canada, only survived by serving niche markets and accepting that they could not displace the incumbents. Africa's task is even tougher. Most of the continent's 21 Eurobond issuers are repeat borrowers, yet their ratings have on average worsened since their inaugural issuances. This contradicts the usual pattern in emerging markets, where familiarity tends to reduce pricing premiums. Even the most prominent issuers — Egypt, Nigeria and South Africa — have faced frequent downgrades, often based on models that lack local granularity or fail to consider governance heterogeneity. Furthermore, agencies frequently do not send analysts to the countries they rate; Fitch has no office at all on the continent, and both S&P and Moody's operate out of a single office in Johannesburg, covering dozens of vastly different economies. Meanwhile, unsolicited ratings, those issued without government request or input, are both more common in Africa and more damaging. Moody's leads the way in such unsolicited assessments, despite objections by African governments to their inherent opacity. It is not surprising, therefore, to see a resurgent push for an independent agency, given the cost of delays. Between 2021 and 2024, for instance, the average coupon on African Eurobonds nearly doubled to just under 11 percent, even as fundamentals remained stable. The continent pays more to borrow than its peers with comparable economic indicators. Hafed Al-Ghwell Moreover, the absence of localized assessment left 22 African countries unrated, starving them of institutional capital. When Botswana and Mauritius secured investment-grade ratings, they accessed financing at 300-400 basis points below regional peers. At a continental level, each one-notch upgrade in a rating could unlock more than $15 billion in much-needed capital. The cost of waiting is clear and unambiguous. Yet, the creation of AfCRA cannot be reduced to a matter of injustice alone. The economics of operating a credit rating agency are ruthless. Even the most optimistic forecasts suggest that the launch of a credible African agency would require $400–500 million in capital, an amount that dwarfs the annual budget of the African Union itself. A very familiar, and suffocating, dependency loop swiftly kicks in; the AU's own programs remain more than 60 percent funded by the EU and other external partners, and if these same entities are now expected to bankroll an 'African-owned' ratings apparatus, the concept begins to cannibalize its own purpose. Beyond the matter of funding, AfCRA would also find itself confronted by the same structural hurdles that felled its European predecessors. Regulatory legitimacy, for one thing, cannot be assumed. In many global markets only ratings from the Big Three are recognized, particularly among institutional investors bound by prudent regulation. Even with improvements in rating models, the acceptance of new agencies into the portfolios of pension funds or sovereign wealth funds hinges on an arduous and opaque process of validation by regulators located far outside Africa. Without international regulatory recognition, AfCRA risks becoming an advisory service masquerading as an agency; technically useful but irrelevant where it matters. Even if credibility can somehow be established, the pipeline of rating activity might not justify the operating costs. Government debt issuance in Africa remains sporadic and constrained. Moreover, much of the domestic debt, particularly in Francophone Africa, is already absorbed by regional banks under arrangements that do not require third-party ratings. Corporate appetite for ratings is growing but still shallow. GCR Ratings, once Africa's most promising homegrown agency, did not consider government bond ratings a serious business line, and it has since been acquired by Moody's, effectively reversing the localization effort. And then there is the governance risk. Africa's existing national and regional agencies have not been free from scandal. Recent cases, such as West African agency DataPro's withdrawal from a local firm because of a fraudulent rating that was exposed by a US research organization, highlight the fact that domestic proximity does not immunize against error or, worse, complicity. Creating an agency without a ferociously independent mandate, transparent methodology, and hard, legal accountability would not reduce bias, it would simply substitute one form of distortion for another. Ultimately, the issue is not whether Africa deserves better ratings; it certainly does. However, establishing an agency without first fixing the deficits in data integrity, fiscal reporting, macroeconomic coherence, and regulatory independence might produce only a costly mirror image of the very system it seeks to escape. A credible alternative cannot be built on grievance alone, but it could be a catalyst for data reform, methodological innovation, and investor dialogue, which might finally ensure that finance costs reflect Africa's true risk and not perceived ghosts from the past. However, such an undertaking must emerge as a result of discipline, innovation and, above all, proof of its usefulness to markets. Otherwise, AfCRA runs the risk of being filed away in the continent's growing archive of initiatives that were politically resonant but financially futile.
