The issuer's short-term rating remains at Not Prime.
In a related rating action, Moody's has downgraded the rating of the government-owned
The outlook remains negative. DBM's senior unsecured rating has been lowered to B2 and its senior unsecured MTN rating to (P)B2. Since DBM's payment obligations carry a credit guarantee of the Government of
The long-term local currency country risk ceiling remains unchanged at Ba3. The long-term foreign currency deposit ceiling is revised to B3 from B2, while the foreign currency bond ceiling has been revised to B1 from Ba3. All short-term ceilings remain at Not Prime. These ceilings act as a cap on ratings that can be assigned to the foreign- and local-currency obligations of entities domiciled in the country.
Moody's decision to downgrade
First driver -- A sharp deterioration in the external liquidity position
Total foreign reserves have fallen rapidly, to
Expansionary policies have fueled demand for imports, adding further pressure to the external reserve position. Reserves would most likely be lower, were it not for the
The investment regime remains unpredictable, suggesting that FDI will remain subdued at least over this year. Further ahead, instability in the investment regime threatens to dampen the development of the mining sector. This would have negative consequences on
-- which gauges the adequacy of reserves with respect to maturing external debt obligations over the next year -- has risen to an estimated 130% in 2014 and will increase further to 196% in 2015, significantly above a prudent 100% threshold for systems that are heavily dependent on foreign creditors.
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