Baku: Moody’s may soon upgrade Azerbaijan’s credit rating, potentially enhancing the nation’s standing in international financial markets. ING Group, the Netherlands’ largest financial corporation, has forecasted this possibility, APA-Economics reports.
According to Azeri-Press News Agency, ING suggests that despite anticipated declines in trade and budget surpluses, Azerbaijan’s credit fundamentals remain robust. The nation benefits from substantial foreign exchange reserves and minimal external financing requirements. Azerbaijan’s ratings are on a trajectory toward investment-grade, with Fitch having already raised its rating to BBB- last July, while Moody’s has issued a positive outlook. This alignment with market valuations and pricing could result in Moody’s upgrading Azerbaijan’s credit rating this year, granting the country its second investment-grade rating and raising its composite rating to IG.
Furthermore, ING highlights that progress toward a peace agreement with Armenia has positively influenced market perceptions. However, Azerbaijan’s bond spreads have lost some appeal when compared to other BBB-rated nations. Additionally, ING assesses the probability of the Azerbaijani government issuing new Eurobonds as low.
It’s important to note that “Fitch Ratings” and “S and P Global Ratings” classify ratings of BBB- and above as investment-grade, while “Moody’s” considers ratings of Baa3 and higher to be investment-grade. Achieving such a rating would enhance Azerbaijan’s profile as a reliable borrower in international financial markets.