Debt Rating Q

Which of the following is least likely a factor used by Standard & Poor’s rating agency to assess the creditworthiness of a government’s foreign currency debt? A) Income and economic structure. B) Net public debt. C) Total net external debt. D) Country’s balance of payments. T/G


A or B… and they probably care more about income than internal debt.

i think B too

come to think of it I think it’s C net public debt should include both internal and external so i change to C


Your answer: D was incorrect. The correct answer was A) Income and economic structure. For foreign currency debt, Standard & Poor analyzes a country’s balance of payments, net public debt, total net external debt and net external liabilities. T/G

A) Income and economic structure. you would need to see if your budget is in excedent or deficit - for that you need income and structure B) Net public debt. This would show the debt ratio C) Total net external debt. I think this is not comprehensive enough D) Country’s balance of payments This is important since it’s external debt- you need to see how much inflows/outflows you have in the currency you are borrowing to asses capacity to pay in that currency

^ obiously wrong whew

thanks for posting… guaranteed there will be a question on this or similar on exam (could be the municipal or the dedicated muni asset)… these are deceptively tough as there’s a list of things they look at, but you’d think they basically look at everything.