Moody’s changes Papua New Guinea view

Moody’s Investors Service said it changed the outlook on Papua New Guinea's issuer rating to negative from stable and affirmed the B2 rating.

The local-currency bond and deposit ceilings are unchanged at Ba2. The foreign currency bond ceiling is unchanged at B1 and the foreign currency deposit ceiling is unchanged at B3.

In addition, the short-term foreign-currency bond and deposit ceilings are Not Prime.

The agency said the decision to change the outlook to negative reflects elevated government liquidity risks stemming from high gross borrowing requirements and limited funding sources, reflected in growing reliance on short-dated, high interest rate domestic securities for funding.

Liquidity constraints put downward pressure on Papua New Guinea's fiscal strength, despite ongoing fiscal reforms aimed at supporting government revenue in the medium term, Moody’s said.

As they persist, liquidity constraints raise refinancing risks, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.