09.00 - 09.15 Welcome and Introduction
A global overview about current ratings and their relevant peer groups, as well as international rating agency criteria for various sectors.
09.15 - 12.30 Session 1: Standard & Poor's sovereign rating criteria:
Sovereign indicative rating level
- Institutional and economic profile
- Institutional assessment
- Economic assessment
- Flexibility and performance profile
- External assessment
- Fiscal assessment
- Monetary assessment
Foreign-currency vs. local-currency sovereign rating
After completing Session 1, participants will be able to analyse a sovereign's institutional effectiveness, considering factors such as predictability of policymaking, external security risks, etc. The economic assessment will help participants to identify the key driver's for the economic development which is often the long-term basis for sovereign creditworthiness. The focus is identifying potential economic volatility or concentration, stemming e.g. from above-average reliance on receipts from commodities.
Participants will further be able to analyse the financial flexibility of sovereigns, taking into account factors such as the sovereign's external position, which gives the participants the ability to inspect the sovereign's currency status and its external liquidity, relative to the rest of the world.
The second important part of assessing a sovereign's financial flexibility is the fiscal assessment, meaning assessing the effect of an increasing/decreasing general government debt burden and relate it to the country's respective funding and debt structure, contingent liabilities, etc. The session will also explain the difference between the various debt definitions, such as net external debt burden and general government debt, including identifying their sustainability and early warning signs.
After completing the session, participants will further be able to explain the monetary assessment - which is the third part of assessing a sovereign's financial flexibility - including its factors such as the exchange rate regime, credibility of monetary policy and connect it to a country's development level of financial system and capital markets.
Finally, the participants will be able to differentiate between foreign-currency and local-currency debt in order to apply credit risk correctly to a specific debt instrument and learn what they should and what they could incorporate in their internal rating tools.
12:30 - 13:30 Lunch
13:30 - 16:00 Session 2: Other relevant methodologies
- Guarantee criteria
- Rating Partially Guaranteed Sovereign Debt
- Banking Industry Country Risk Assessment Methodology and Assumptions
- Bank system support
- Bank Capital Methodology and Assumptions
- Rating Implications of Exchange Offers and Similar Restructurings
After completing session 2, participants will be able to compare different forms of guarantees and interpret them in the light of a sovereign's banking system. Participants will also be able to relate rating implications of exchange offers and make use of the information for their internal purposes, i.e. taking into account various constellations of credit enhancement or overlooked credit risks.
16:00 - 16:30 Recap