Sovereigns: Sovereigns Rating Methodology

Summary

This document describes KBRA’s rating methodology as it pertains to rating sovereign governments. KBRA’s methodology for rating sovereigns relies on quantitative and qualitative measures. It is generally based on a scorecard and a track record of at least five years of historical and recent data, and considers the thrust of policies, political constraints and priorities, financial flexibility, vulnerability to shocks, trend analysis, and peer comparisons. KBRA may consider rating sovereigns with less publicly available data on a case-by-case basis. KBRA’s sovereign ratings use KBRA’s credit rating scale, available on our website.

Sovereign ratings are government issuer ratings and also bond ratings. KBRA generally assigns sovereigns both a local currency and foreign currency rating.

KBRA’s sovereign ratings do not act as ceilings for other obligors in the country.…