Moody's completes periodic review of Bulgaria's ratings
Moody's Investors Service said that it completed a periodic review of the ratings of Bulgaria's government, which did not involve a rating committee.
The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of Bulgaria's ratings, and a comparison of the financial and operating profile to similarly rated peers, the ratings agency said in a statement on Friday.
The review does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future, Moody's noted.
Moody's also said in its statement:
"Bulgaria's Baa1 government bond rating reflects a "baa3" economic strength, balancing the relatively low size of the economy and lower wealth per capita (vs the EU average) and the limited scarring from the pandemic due to the larger share of manufacturing activities; "baa1" institutions and governance strength, reflecting enhanced policy effectiveness confirmed by the country's accession to the Exchange Rate Mechanism (ERM II) in July 2020 as well as long-standing challenges in the areas of rule and law and control of corruption; "aa3" fiscal strength, mirroring healthy public finances despite the coronavirus outbreak and a clear commitment to the stability of the currency board arrangement in order to join the euro area in the coming years; and "ba" susceptibility to event risk assessment, driven by the country's banking system risks although recent developments point to higher liquidity and a stronger capitalization."