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Sovereign ratings wrap: Moody's revises Pakistan's outlook, downgrades Namibia

S&P Global Market Intelligence presents a summary of ratings actions on sovereigns and other key territories from Dec. 2 to Dec. 8.

EUROPE

* DBRS Morningstar confirmed Denmark's long- and short-term foreign- and local-currency issuer ratings at AAA/R-1(high), with a stable trend. The rating agency said the ratings are supported by the country's strong external position, public finances, credible framework and diversified economy. The country's interconnected financial system, high levels of household debt and potential pressures on the housing market weigh on the ratings, DBRS Morningstar added.

* DBRS Morningstar confirmed Germany's issuer ratings at AAA/R-1(high), with a stable trend, saying it expected the country's credit fundamentals to remain solid, despite the weak economic performance over the previous year. The ratings are supported by Germany's diverse economy, robust public finances, credible fiscal framework and strong external position. Contingent liabilities and an expected decline in the working-age population pose risks to public finances and the country's growth potential, the rating agency said.

* Fitch Ratings affirmed Sweden's long- and short-term foreign- and local-currency issuer default ratings at AAA/F1+, with a stable outlook, citing the country's high per capita income, declining public debt level, strong governance indicators and sound economic policymaking. The rating agency said continued weakness in consumer and business sentiment and a cooling housing market are offset by the krona's flexibility, slight fiscal expansion and a highly accommodative monetary policy.

* Fitch affirmed Croatia's issuer default ratings at BBB-/F3, with a positive outlook. The rating agency said the rating reflects the country's relatively higher human development, governance indicators and per capita GDP. The ratings are constrained by weak growth potential and high public sector debt, Fitch added. The outlook reflects the significant reduction in gross general government debt stemming from robust fiscal policies, the rating agency also said.

* DBRS Morningstar confirmed Poland's issuer ratings at A/R-1(low), with a stable trend, due to its robust macroeconomic performance, low public debt-to-GDP ratio, strong monetary policy framework, flexible exchange rate regime and its integration within the European Union. The country's relatively low per capita GDP, unfavorable demographic trends and potential risks to EU funding constrain the ratings.

AMERICAS

* Moody's placed Bolivia's Ba3 local- and foreign-currency issuer ratings under review for downgrade, following the resignation of President Evo Morales. The resignation has raised policy uncertainty and might lead to an economic slowdown, which in turn could weaken the country's credit profile, according to the rating agency. Moody's said the assessment of the extent of risks to macroeconomic and policy stability may go beyond the usual three months as it waits for the new government to define its policy agenda.

* Fitch Ratings affirmed Paraguay's issuer default ratings at BB+/B, with a stable outlook, citing consistent macroeconomic policies, low general government debt level and relatively robust external liquidity. Constraints to the ratings include the country's weak but improving governance indicators, low per capita GDP and a shallow local capital market. The rating agency said the country's weak structural features are balanced by improving government effectiveness, voice and accountability, and regulatory quality.

* S&P Global Ratings affirmed Guatemala's long- and short-term foreign currency ratings at BB-/B, with a stable outlook, saying the country's governing public institutions and a challenging political environment constrain effective policymaking. Guatemala's low per capita GDP, persistently narrow tax base, and the dearth of basic public services and physical infrastructure are balanced by its solid external position, stable general government debt-to-GDP ratio and controlled inflation, the rating agency said. It also affirmed the South American country's local currency ratings at BB/B.

ASIA-PACIFIC

* Moody's revised its outlook on Pakistan's ratings to stable from negative, saying it expected the country's payments situation to keep improving. The rating agency cited the strengthening independence of the central bank, its commitment to currency flexibility, narrowing deficit and existing fiscal reforms, which are offset by government liquidity and debt sustainability risks. Moody's affirmed Pakistan's local- and foreign-currency long-term issuer and senior unsecured debt ratings at B3.

MIDDLE EAST AND AFRICA

* Moody's revised Nigeria's outlook to negative from stable, saying the country's "extremely narrow" revenue base and persistently sluggish economic growth continue to prevent fiscal consolidation and lead to a further weakening of government finances. The rating agency also flagged the country's increasing reliance on foreign portfolio investors as a source of foreign exchange reserves, and the possibility that the government would resort to inefficient methods to finance its debt burden. Moody's affirmed Nigeria's B2 credit ratings.

* Moody's downgraded Namibia's long-term issuer ratings to Ba2 and revised the outlook on it to stable, citing the country's mounting debt levels, despite the ongoing fiscal consolidation, and economic growth that has remained weak for longer than anticipated. The rating agency expects Namibia's weak medium-term economic growth prospects to add to public debt burden as it may constrain government revenue.

* S&P Global Ratings revised the outlook on Senegal's ratings to stable from positive, saying it expects the country's general government debt to continue to rise as a percentage of GDP beyond previous projections, despite robust economic growth and fiscal consolidation. The increase in government debt makes the country vulnerable to funding shocks that could come from higher interest rates, weakened access to external financing and an unexpected curb on growth, according to S&P Global Ratings, which affirmed the country's sovereign credit ratings at B+/B.

* Fitch Ratings affirmed Gabon's long- and short-term foreign- and local-currency ratings at B/B, with a stable outlook. Fitch said Gabon's improving fiscal trajectory supports its ratings, which are constrained by financing challenges, weak public-finance management, relatively weak governance quality, high government debt and high commodity dependence.

* S&P Global Ratings assigned BBB-/A-3 long- and short-term sovereign credit ratings to Saint Helena, with a stable outlook, citing the unlikely disruption of its institutional and budgetary support from the U.K. amid political and Brexit-related uncertainties. The rating agency said the island's remoteness and developing infrastructure, and a nascent private sector limit its medium-term growth prospects.

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