Page 1 of 1

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.