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EРCУБOРNИOКMАY
Igor Davkov
The holds a PhD in the field of
monetary economics and finance
“BB” with
a negative
tendency…
O n August 19, the credit the one assigned with the last ranking
agency Fitch Ratings an- by Fitch Ratings. Regardless of that,
nounced that it is reduc- in both cases it is a matter of rating
ing the long-term credit which shows that the debt of this
rating of the Republic of country, in foreign and in local cur-
Macedonia from “BB+” to “BB”. The rency, is classified as non-investment,
change of the rating refers to long- speculative debt. By definition, credit
term securities which have been is- rating is an assessment of the rating
sued in local and in foreign currency. subject, which is the country in our
The tendency of the rating is assessed case, to timely and fully respond to the
as “negative”. This is the first reduc- undertaken financial obligations or in
tion of the credit rating by this rating one word, assessment of creditworthi-
agency since November 2005 when ness. The debtors with “BB” rating are
this rating agency for the first time as- not expected not to respond to their
signed a credit rating to this country. obligations in the short run, however
The reduction of the rating was pre- the rating gives an indication of an
ceded by change of the so called ten- increased risk due to non-payment
dency of the rating which in August of obligations, particularly in case of
2015 changed from stable to negative unfavorable changes of the general
(BB+ negative outlook). The last credit business, economic and political con-
rating awarded by the second credit ditions. The highest rating which can
rating agency which ranks the credit be assigned to a company in this coun-
risk of this country, S&P, assigned in try or so called County ceiling was also
2015, is at the “BB-” level with a stable reduced from “BBB-” to “BB+”, while
tendency. the rating of the short-term debt in
national currency was not corrected,
In essence if one observes the ma- that is, it remained “B”.
trices on the basis of which mapping
is performed of the credit ratings as- Fitch Ratings uses internally devel-
signed by different credit agencies, oped model for assessment of the cred-
one can determine that the rating as- it rating which is based on 18 variables
signed by S&P in 2015 is lower than based on centered averages, including
30 October 2016
