Learning Module 15 Credit Analysis for Government Issuers

Which two components primarily determine a sovereign government's ability to service its debt?

Which qualitative factor best captures a government's willingness to pay on its debt?

A sovereign has current debt/GDP of 120% and interest payments equal to 6% of revenue. According to common sovereign quantitative metrics, which concern is most acute?

Which external metric best indicates short-term ability to meet external obligations?

Why is reserve currency status important for sovereign creditworthiness?

Which of these is a primary risk that differentiates sovereign from corporate debt?

Which quantitative ratio would analysts most often use to assess a government's solvency trend over time?

What is the key difference between general obligation (GO) bonds and revenue bonds issued by sub-sovereign entities?

Which of the following best explains why agencies or public banks often receive ratings equal to the sovereign?

How does central bank independence typically affect sovereign credit risk?

Which scenario most increases sovereign vulnerability to an external shock?

What role do multilateral lenders (e.g., IMF) typically play during a sovereign crisis?

Which indicator would most directly measure a sub-sovereign issuer's immediate liquidity?

Which factor most reduces recovery rates for lower-ranked creditors in a government issuer default?

Which non-sovereign issuer type is most likely to receive zero risk weighting under bank capital rules because of explicit sovereign support?

A regional government issues a GO bond backed by its general revenues. Which factor most affects its creditworthiness relative to the national sovereign?

Which of the following best describes a revenue bond's primary credit-test metric?

Which scenario would most likely trigger a sovereign ratings downgrade even if fiscal ratios are stable?

Why might a supranational issuer like the World Bank typically receive a strong credit rating?

Which of these is an example of an explicit form of sovereign support for a non-sovereign issuer?

Which of the following best describes 'fiscal flexibility' for a sovereign?

A country issues debt in a non-reserve domestic currency and imposes strict capital controls. How does this affect its external credit profile?

Which factor most differentiates an agency bond from a covered bond?

Which of the following issuer characteristics would most likely support an upgrade of a sovereign's rating?

Which quantitative indicator best signals a country's reliance on external borrowing for development?

Which feature differentiates revenue bonds for infrastructure projects from corporate project financings?

Which of the following best describes 'reserve ratio' in sovereign external analysis?

Which factor is most indicative of political risk relevant to sovereign credit?

Which of the following events would most likely tighten a sovereign's credit spreads?

Which element of sovereign analysis is most useful to detect contingent fiscal pressures such as large future pension liabilities?

Which policy action is most likely to strengthen a sovereign's external position in the near term?

Which of the following best captures 'economic flexibility' in sovereign analysis?

Which action by a sub-sovereign issuer would most likely be viewed favorably by a rating agency?

Which of the following is a common covenant or protective feature in project revenue bonds?

How do rating agencies typically treat the credit of an agency that is 'equalized' with its sovereign?

Which of the following is most likely true about a small emerging market with a large informal economy?

A sovereign with strong public finances but escalating geopolitical conflict at its border is most likely to see what immediate market reaction?

Which of the following describes 'debt affordability' measures for sovereigns?

Which of these best exemplifies an external shock that can rapidly increase sovereign credit risk?

What is 'debt restructuring' in a sovereign context?

Which indicator would analysts use to compare fiscal burden across countries of different sizes?

How does economic diversification affect sovereign credit risk?

Which outcome is most probable if a sovereign's official reserves fall sharply while external debt stays constant?

When evaluating the credit of a local government revenue bond for a toll road, which metric is most relevant?

Which of the following scenarios best illustrates sovereign 'credit migration' risk?

Which of the following best describes IMF conditionality when providing financial support?

If a country is heavily dependent on remittances for foreign currency inflows, what risk should analysts prioritize?

Which of the following most clearly signals a sovereign may have limited fiscal space?

Which of the following is a reason sovereign credit ratings often lag market pricing?

Which of the following best describes the primary analytical difference between sovereign and non-sovereign (sub-sovereign) credit analysis?