Kroll Bond Rating Agency (KBRA) releases its Sovereigns 2022 Outlook. Many sovereigns have weathered the shock of COVID-19 far better than anticipated, partly thanks to abundant global liquidity and improvements made to debt profiles prior to the pandemic. Managing the next phase of the pandemic—marked by inflation and accelerating rate hikes—will once again test some sovereigns and potentially elevate debt sustainability risks.

Key Takeaways

• A sizable rise in debt accrued across the sovereign universe, especially by AI governments.
• Mixed Outlooks, with AIs better positioned to weather future pressures compared to EMs.
• KBRA’s sovereign ratings portfolio experienced an improvement in 2021.

Following a period of COVID-related deterioration in 2020, KBRA’s sovereign credits moved in a favorable direction during 2021, indicating a strengthening position entering 2022. The improved ratings included one Upgrade and one revision to Negative Outlook from Watch Downgrade.

Click here to view the report.

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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