Moody’s changes Maldives to negative

Moody's Investors Service said it changed the outlook on Maldives' issuer rating to negative from stable and affirmed the B2 issuer and senior unsecured bond ratings.

“The decision to change the outlook to negative reflects liquidity and external vulnerability risks stemming from a sharp rise in the government's debt burden that is expected to extend at least until the beginning of the next decade when a large-scale infrastructure program is scheduled to complete,” the agency said in a news release.

Moody’s said the government's liquidity risks reflect limited financing sources, including the domestic banking system and external investors, to meet sizeable gross financing needs required by the infrastructure program, at a time when, according to the agency’s assumptions, the government will continue to need financing for current spending.

These risks could rise in the run-up to repayments on a sovereign bond that are due in 2022, the agency added.

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