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Christensen & Meyers Global Ratings

PostPosted: Sun May 24, 2020 4:24 pm
by Maxington
Christensen & Meyers Global Ratings is a Kazulian-Hutorian credit rating agency and a division of the financial research and analysis corporation Christensen & Meyers. As a credit rating agency, it is responsible for issuing ratings for the debt of public and private companies, and other public borrowers such as sovereign governments and government institutions.

Christensen & Meyers rates borrowers on a scale from AAA to D. 'AAA' is the highest issuer credit rating assigned by the company. This means that the entity has an extremely strong capacity to meet its financial obligations. While 'D' is the lowest issuer credit rating assigned by the company. This means that the entity has defaulted on all of its financial obligations and thus has no capacity to meet them. The Company has sought to omit ratings below CCC- mainly due to the fact that the Dovanian region needs to be de-risked as most of its members fit within the categories below CCC- which are: CC+, CC, CC-, C+,C,C- and D respectively.

Re: Christensen & Meyers Global Ratings

PostPosted: Tue May 26, 2020 9:22 pm
by Maxington
Valruzia's Credit Rating confirmed as 'AA'; Outlook remains Stable
January, 4762

Valruzia's rating balances the strengths of an advanced and wealthy economy, with a record of medium to strong governance and
public institutions, against weak growth prospects and an extremely high public debt. Its high external finances can be
attributed to its continuous current account surplus and large net external credit and international investment position relative
to regional peers. Its external resilience is primarily underpinned by the perception that the nation is an investor safe haven
for the Seleyan continent. Valruzia's debt to GDP ratio stands at around 200%, ranking it among the highest in the world
recognising the nation's history of large deficits and low revenue streams, and is a key rating constraint. Lowering interest
rates will allow the government to service its sizeable debt burden. However, the high debt leaves the nation vulnerable to
stricter financial conditions or stronger external shocks. The nation's financial strength can be undermined by both a declining
workforce and an ageing population.

Although low-interest rates have kept Valruzia's public debt on a stable trajectory, there is a clear lack of relation which is a
constraint to the rating. Christensen & Meyers expects the policy of reflation to continue in the coming years with increased
intensity as the government rolls out a monetary policy aimed at expanding the state's ability to service its debt burden and
boost growth potential. Although the monetary policy is not mature with time, Christensen & Meyers expects that it will produce
great potential for debt refinancing. We expect inflation to increase in the coming months as the NBW (National Bank of Valruzia)
moves to buy up debt in the financial system. We expect that the central government will reduce the VAT rate and remove VAT on
basic items as it moves to ease the burden.

The gradual internationalisation of the NSEC (North Seleyan Economic Community) enables Valruzia to maintain its position as the
region's main benchmark bond issuer amidst the fact that the nation is the only state with sizeable confidence. It reduces
tariffs and duties on trade moving between the signatory nation. The banking system is expected to face structural challenges due
to low-interest rates and slow growth projections. Christensen & Meyers believes that regional banks will face pressures on net
interest margins and profit. This may encourage mergers and for the banks to diversify their business models. Low returns on
government-bond yields will encourage Valruzian financial institutions to expand their operations overseas, to potentially
riskier markets. The lack of financing mechanisms to cover the government's deficit remains a major factor in the reason for
Valruzia's "AA" rating.

Re: Christensen & Meyers Global Ratings

PostPosted: Mon Jun 01, 2020 7:06 pm
by Maxington
Deltaria's Credit Rating confirmed as 'A+'; Outlook remains Stable
January, 4765

Deltaria has an advanced, high value-added economy with partially strong political and social institutions albeit with the lack
of a truly diversified economy. It benefits from low private-sector indebtedness and a high household savings rate. Christensen &
Meyers considers the government's debt structure as favourable, low borrowing costs and strong financing flexibility. The
Positive Outlook reflects favourable fiscal developments and our expectations of a firm downward trajectory for government debt
to GDP as the MEA comes online. We expect economic growth will slow-down slightly, driven by a lack of robust domestic demand and
the poor performances of Deltarian exports. The dynamic labour market, rising wages and fiscal stimulus will support consumption,
while favourable growth in Deltaria's main trading partners, particularly out of the nation's involvement in the MEA.

Rising labour supply, productivity gains and several quarters of robust private investment (particularly in the defence industry)
point towards high potential growth in Deltaria, with government reverting investment into the public sector with major
infrastructure projects, unemployment is expected to decrease within the duration of said legacy infrastructure projects.
Although investment growth coming out of the MEA is a potential, much is to be seen for the organisation's ability to become
fully operational. Potential up-risk has thus been factored in; these are being offset by external risks including rising trade
tensions, which could hinder export performances. Christensen & Meyers forecasts general government fiscal surplus to narrow
slightly as the main petroleum-producing nations of Majatra have the potential to clash with those in the Northern Hemisphere
amidst consolidation through the MEA.

Political uncertainty coming out of the Doron Akigan Independence Party and its push for succession from Deltaria places the
nation's rating stability at risk. Although the nation is not the net external creditor, Christensen & Meyers recognises
the Deltarian Government's attempts to pivot the nation towards attaining a safe net external creditor position. It is expected
the such a move will be difficult for the Deltarian Government recognising that it does not possess a sovereign wealth fund of
any kind, nor it maintain a mature domestic financing mechanism, making it difficult for the government financial shortfalls
should the nation's budgetary surplus switch to a deficit. Banking sector health has improved, helped by ongoing consolidation,
leading to rising capitalisation. Credit growth is picking up and profit is rising supported by improved asset quality and lower
provisioning. Nonetheless, the cost-to-income ratio remains high, and although exposure of Deltarian subsidiaries to the Majatran
continent has declined and funding sources are more stable, the region remains crucial for Deltarian banks' subsidiaries
profitability. Geographic concentration is elevated, with Deltaria's immediate neighbours accounting for a large percentage of
the subsidiaries' loan exposures.

We forecast the current account surplus will increase in the coming years, supported by the recovery of the tourism sector and
dynamic exports. Although the lack of a truly diversified economy (and not one almost solely coupled to defence) has played an
important role in Deltaria's 'A+' rating.