Moody’s rates Swaziland B2

Moody's Investors Service said it assigned issuer ratings of B2 to the Government of Swaziland.

The outlook is negative.

Moody’s said the assignment is based on the following key drivers:

• Economic strength assessed at Low (+), reflecting the country's relatively small and slow-growing economy, but well integrated and resilient on top of its middle-income status;

• Institutional strength constrained by governance challenges that have been hampering fiscal policy-making and progress with structural reforms;

• Moderate (+) fiscal strength that balances low public debt-to-GDP ratio which is below regional and similarly-rated peers, against structural fiscal weaknesses that has caused rapid debt accumulation and increased interest costs in recent years; and

• Moderate (+) susceptibility to event risk, which reflects ongoing government liquidity challenges.

“Concurrent with the first-time rating assignment, Moody's has also assigned a Ba3 ceiling for local currency debt and bank deposits as well as a B1 foreign currency debt ceiling and a B3 foreign currency bank deposit ceiling,” the agency said in a news release.

“The local-currency country ceiling reflects the maximum credit rating achievable in local currency for a debt issuer domiciled in Swaziland (similarly for a bank deposit). The ceilings on foreign-currency bonds and bank deposits capture foreign-currency transfer and convertibility risks.”

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