Moody’s eyes Pakistan for cut

Moody’s Investors Service said it placed the government of Pakistan’s local- and foreign-currency issuer and senior unsecured B3 ratings under review for downgrade.

The review for downgrade reflects Moody’s expectation the government will request for official bilateral sector debt service relief under the recently announced G20 initiative, the agency said. The G20 also asked the private sector creditors to participate in its initiative.

“Suspension of debt service obligations to official creditors would be unlikely to have rating implications; indeed, such relief would increase the fiscal resources available to the government for essential health and social spending due to the coronavirus outbreak,” Moody’s said in a press release.

The review will allow the agency to assess whether participation in the initiative would likely entail default on private sector debt, notwithstanding the intended voluntary nature of private sector participation and that the country has not indicated an interest in extending the debt service relief request to the private sector; and whether any losses expected to arise from that participation would be consistent with a lower rating, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.