Thread: Financial News
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Old March 10, 2013, 01:08 AM
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I imagine it will. I feel that this issuance is tied to financing large scale infrastructural projects like the Padma Bridge, as in exploiting its credit rating stability to attract investors.

As of September, 2012, this is what Moody's said:

" Singapore, September 18, 2012 -- Moody's Investors Service says that the outlook for the Government of Bangladesh's Ba3 foreign and local currency bond ratings is stable.

Moody's sovereign ratings for Bangladesh's are based on low levels of economic and institutional strength, as well as low-to-moderate government financial strength, balanced against a low susceptibility to event risk.

According to a new report titled, "Credit Analysis: Bangladesh, Government of", while Bangladesh has achieved a track record for macroeconomic stability over the past decade, GDP per capita remains the lowest amongst all rated countries. Moreover, a reliance on private consumption--supported by worker remittances--and a poorly diversified export sector leave the country vulnerable to a further slowdown in global growth.

Since 2011, overheating pressures manifested themselves in rising prices and a deterioration in the balance of payments. While these have been contained recently, fundamental factors behind the shock--such as infrastructure constraints in the power sector--still need to be resolved in order to assure a sustainable growth trajectory of around 7% per annum."

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Obviously this is well before the current political strife. Not sure if this is the best time to issue such a bond, given that investor confidence isn't likely to be high. I read a Dhaka Bank report that highlighted the other dangers might be: foreign currency risks, further depreciation of the Taka (but that's always a risk when issuing a bond in a foreign currency), the high interest rate that you mentioned, the need to gather more expertise in this area as our domestic bond market is weak, whether we'll even be able to raise the income needed to repay this debt, etc.
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