Moody’s announces completion of a periodic review of ratings of Maldives, Government of

Singapore, July 25, 2020 — Moody’s Investors Service (“Moody’s”) reviews all of its ratings periodically in accordance with regulations — either annually or, in the case of governments and certain EU-based supranational organisations, semi-annually. This periodic review is unrelated to the requirement to specify calendar dates on which EU and certain other sovereign and sub-sovereign rating actions may take place.

Moody’s conducts these periodic reviews through portfolio reviews in which Moody’s reassesses the appropriateness of each outstanding rating in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. Since 1st January 2019, Moody’s issues a press release following each periodic review announcing its completion.

Moody’s has now completed the periodic review of a group of issuers that includes Maldives and may include related ratings. The review did not involve a rating committee, and this publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future; credit ratings and/or outlook status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

The credit profile of Maldives (issuer rating B3) incorporates the sovereign’s “ba3” economic strength assessment, taking into account the economy’s relatively weak global competitiveness outside of the tourism industry, as well as incorporating the possibility of significant economic loss stemming from Maldives’ exposure to natural disasters and climate change, particularly given the economy’s reliance on natural assets-based tourism; its “b3” institutions and governance strength, which incorporate the challenges associated with developing institutional quality in a small island nation, and capacity constraints to fiscal and monetary policy effectiveness; and “b1” fiscal strength, which takes into account anticipated deterioration in debt affordability in the coming years, as well as the contingent liability risks posed to the government’s balance sheet from government guaranteed debt. Susceptibility to event risk is “b”, driven by government liquidity risk. This assessment incorporates our expectation of a sharp rise in the government’s gross borrowing needs, as well as intermittent access to external financing through a relatively narrow range of investors and a variety of official lenders, all in the run-up to repayment on a sovereign bond that falls due in 2022.

This document summarizes Moody’s view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was Sovereign Ratings Methodology published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

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