Credit Analysis for Government Issuers
50 questions available
Key Points
- Government Institutions: Executive stability and willingness to pay.
- Fiscal Flexibility: Ability to adjust revenue and expenditures.
- Monetary Effectiveness: Credibility and financial system depth.
- Sovereign Immunity: Legal limitation on forcing bankruptcy.
Key Points
- Fiscal Strength: Debt burden and debt affordability metrics.
- Economic Stability: Real GDP growth, volatility, and scale.
- External Stability: FX reserves, balance of payments, and external debt burden.
Key Points
- Non-Sovereign Issuers: Agencies, Supranationals, Regional Governments.
- GO Bonds: Unsecured, backed by full faith and credit (taxing power).
- Revenue Bonds: Project-specific, higher risk, analyzed via debt service coverage.
Questions
Which of the following is considered a qualitative factor regarding 'Government Institutions and Policy' in sovereign credit analysis?
View answer and explanationWhat legal concept prevents investors from forcing a sovereign government to declare bankruptcy or liquidate assets?
View answer and explanationWhich factor is categorized under 'Monetary Effectiveness' in qualitative sovereign analysis?
View answer and explanationUnder 'Economic Flexibility', which of the following is a key assessment point?
View answer and explanationWhich ratio is used to measure 'Debt Burden' under Fiscal Strength?
View answer and explanationA country has Government Interest Payments of 50 billion and Total Revenue of 250 billion. What is its Interest to Revenue ratio?
View answer and explanationWhich quantitative factor category includes 'Balance of Payments' and 'Currency Reserves'?
View answer and explanationHow is 'Real GDP Growth' calculated based on the provided text?
View answer and explanationWhich of the following describes 'Supranational Issuers'?
View answer and explanationWhat is a primary characteristic of General Obligation (GO) Bonds?
View answer and explanationWhich metric is crucial for the risk assessment of Revenue Bonds?
View answer and explanationWhat distinguishes 'Agencies' (Quasi-governmental bodies) in terms of credit rating?
View answer and explanationIn the context of Fiscal Strength, what does 'Debt Affordability' measure?
View answer and explanationIf a country has Real GDP of 100 in year T-1 and 105 in year T, what is the Real GDP Growth rate?
View answer and explanationWhich qualitative factor considers the 'Adaptability to Shocks'?
View answer and explanationWhich ratio measures the 'Size of Economy'?
View answer and explanationWhat does 'Reserve Ratio' specifically calculate in the context of External Stability?
View answer and explanationWhich factor under 'Government Institutions and Policy' involves the predictable enforcement of contracts?
View answer and explanationWhat is the primary risk associated with Revenue Bonds compared to General Obligation Bonds?
View answer and explanationWhich entity type typically issues debt to finance specific policy goals and is established by the government?
View answer and explanationWhich ratio measures the volatility of economic growth?
View answer and explanationIn the 'External Debt Due' calculation, what is the numerator?
View answer and explanationWhich qualitative factor includes 'Geopolitical Risk'?
View answer and explanationRegional Government Issuers are typically:
View answer and explanationWhich factor falls under 'Fiscal Flexibility' in qualitative analysis?
View answer and explanationWhat does 'LT External Debt' usually stand for in the context of 'External Debt Burden'?
View answer and explanationWhich of the following is considered a source of Non-Sovereign Government Debt?
View answer and explanationCalculate the Debt to GDP ratio if General Government Debt is 500 million and GDP is 2,000 million.
View answer and explanationWhich quantitative factor category includes 'Cyclicality'?
View answer and explanationWhat does 'Global Currency Status' contribute to in credit analysis?
View answer and explanationWhich of the following is an example of a 'Financial System Development' factor?
View answer and explanationWhat is 'Fiscal Discipline' primarily concerned with?
View answer and explanationGeneral Obligation (GO) bonds are evaluated based on:
View answer and explanationWhich ratio includes 'General Government Debt' in the numerator?
View answer and explanationWhich category of non-sovereign issuer enjoys high credit ratings due to collective support from multiple nations?
View answer and explanationThe 'Debt to Revenue' ratio is calculated as:
View answer and explanationWhich qualitative factor involves 'Stable, Predictable Executive, Legislative and Judicial' institutions?
View answer and explanationWhat is the purpose of the 'Per Capita GDP' metric?
View answer and explanationWhich type of non-sovereign debt is 'backed by the government for specific policy goals'?
View answer and explanationWhat does 'FX Reserves to GDP' measure?
View answer and explanationWhich factor is NOT a component of 'Monetary Effectiveness'?
View answer and explanationIf a government has 10 billion in interest payments and a GDP of 500 billion, what is the Interest to GDP ratio?
View answer and explanationThe 'Debt Service Coverage Ratio' is most relevant for which type of bond?
View answer and explanationWhich qualitative factor considers 'Competitiveness'?
View answer and explanationWhat does 'Interest to GDP' measure?
View answer and explanationA 'Revenue Bond' is typically issued for:
View answer and explanationWhat is 'External Debt Burden' defined as in the quantitative factors?
View answer and explanationWhich factor falls under 'Fiscal Strength' in the quantitative analysis section?
View answer and explanationWhat does 'Access to External Funding' indicate in sovereign analysis?
View answer and explanationWhy might a 'Regional Government Issuer' have a different credit rating than the Sovereign?
View answer and explanation