[ad_1]
The number of public debtors going bankrupt this year is likely to break a record due to the severe economic shock from the pandemic caused by the new corona virus, according to a study by Fitch Ratings in London on Tuesday.
The international credit rating agency highlighted that since the beginning of the year, so far there have been three sovereign payment failures: Argentina, Ecuador and Lebanon have been behind with their public debt service obligations.
This means that the number of sovereign debtors who have gone bankrupt has already set an annual record so far: In 2017, three of Fitch’s qualified sovereign debtors also fell behind on sovereign debt. However, analysts at Fitch Ratings in London predict that more government failures are expected this year, based on the rating dynamics since the beginning of the year, which means that the number of delinquent government debtors will exceed the previous annual record. .
To support this expectation, the credit rating agency notes that it has made 29 sovereign downgrades in just four months this year, which is also a record. Also recorded is the net balance of the negative outlook for sovereign debt ratings, which points to the possibility of a downgrade, currently 28 after 4 measures in late 2019. The company also said it maintains a sovereign risk rating of ” CCC “or less for five sovereign debtors. In accordance with Fitch Ratings’ final rating methodology, a “CCC” sovereign rating indicates significant debt risk and the real possibility of bankruptcy for repayment.
The credit rating agency emphasized that bankruptcies involving sovereign debtors are relatively rare: The company has registered only 23 sovereign bankruptcies since it began rating sovereign debt liabilities in the mid-1990s.
Featured image: MTI / Zoltán Máthé
[ad_2]
