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Rating Methodology - Public Finance Sovereign Ratings

Rating Methodology - Public Finance Sovereign Ratings

This rating methodology explains Scope’s approach to assigning sovereign credit ratings. Scope’s assessment continues to be based on five categories of sovereign risk: ‘Domestic economic risk’, ‘Public finances risk’, ‘External economic risk’, ‘Financial stability risk’ and ‘Institutional & political risk’. The respective weights of these key quantitative criteria and the qualitative assessment that accompanies Scope’s approach remain unaltered.

Scope uses this methodology update to i) address some of the data issues identified in the past year and ii) refine some of the calculations of the variables to better assess the underlying risks under Scope’s analytical approach. These changes do not affect the underlying assumptions or key criteria of the sovereign methodology and will have no impact on existing rating of any sovereign rated by Scope.

The purpose of this methodology is to explain to issuers, investors, policymakers and interested market participants how Scope assesses a sovereign’s creditworthiness. This methodology is effective as of its publication and supersedes Scope’s ‘Public Finance Sovereign Ratings’ methodology published in May 2018.