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Corporate And Government Ratings That Exceed The Sovereign Rating

S&P Global Ratings has 90 foreign currency ratings on corporate entities (including financial institutions) and local or regional governments (LRGs) that exceed the foreign currency sovereign credit rating on the country of domicile. Table 1 lists these entities, which are domiciled in 22 different countries. This list does not include state and municipal obligors in the U.S. with ratings above the sovereign.

The list has grown since we expanded our criteria for assessing the risk of the sovereign restricting access to foreign exchange needed for debt service. For more information about the methodology for determining transfer and convertibility (T&C) assessments, please see "Criteria For Determining Transfer And Convertibility Assessments," published May 18, 2009. We publish "Sovereign Ratings History," a record of T&C assessments for all countries with sovereign credit ratings, on a monthly basis (the article was previously titled "Sovereign Rating And Country T&C Assessment Histories").

Meanwhile, we have 77 local currency financial strength ratings on insurance entities that exceed the foreign currency rating on the sovereign (in 22 different countries of domicile). These entities are listed in table 2. An S&P Global Ratings local currency financial strength rating above the sovereign credit rating indicates that there is an appreciable likelihood that the insurer would not default on its insurance policy obligations on a local currency basis in the stress scenario likely to accompany a sovereign default.

A T&C assessment is associated with the likelihood of a sovereign restricting nonsovereign access to foreign exchange needed for debt service. While history shows that many nonsovereign entities default around the time of a sovereign default, in recent years, this rarely has been the result of the inability of resident entities to convert local currency to foreign currency and to then transfer it to nonresidents to meet debt obligations. Instead, the nonsovereign defaults have more often been the result of currency depreciation, economic contraction, liquidity constraints stemming from credit shortages, restrictions on raising utility rates and other price controls, hikes in taxes and government fees amid cutbacks in services, and delayed or partial government payments. The operating and financial characteristics of the entities listed in the tables have been tested against severe downside scenarios. The higher ratings on these entities indicate that S&P Global Ratings believes there is a measurable likelihood that these entities can meet debt obligations even when the sovereign cannot.

In most cases, the nonsovereign foreign currency credit ratings do not exceed the T&C assessment. When exceptions occur, it is S&P Global Ratings' opinion that these entities are well insulated from T&C restrictions and from the other downside scenarios outlined above.

If a sovereign, through membership in a monetary or currency union, has ceded monetary and exchange rate policy responsibility to a monetary authority that the sovereign does not solely control, the T&C assessment reflects the policies of the controlling monetary authority, vis-à-vis the exchange of its currency for other currencies in the context of debt service. The same applies if a sovereign uses as its local currency the currency of another sovereign. A T&C assessment may change sharply if a sovereign introduces a new local currency, by entering or exiting a monetary or currency union or through some other means. This is because the new local currency, and in some cases the new monetary authority, may operate in very different monetary and exchange regimes. The T&C assessment does not normally reflect the likelihood of change in a country's local currency.

Table 1

Corporate And Government Ratings That Exceed The Sovereign Rating As Of April 30, 2021
Sovereign Issuer T&C assessment FC rating

Bahamas

BB BB-/Negative/B
Intercorp Peru Ltd. BBB-/Stable/--

Bahrain

BB- B+/Stable/B
Ahli United Bank B.S.C. BBB/Positive/A-2
Al Baraka Banking Group B.S.C. BB-/Stable/B
Arab Banking Corp. B.S.C. BBB-/Watch Neg/A-3

Brazil

BB+ BB-/Stable/B
Ache Laboratorios Farmaceuticos S.A. BB+/Stable/--
Adecoagro S.A. BB/Stable/--
Ambev S.A. BBB/Stable/--
B2W Companhia Digital S.A. BB/Stable/--
Braskem S.A. BB+/Stable/--
Embraer S.A. BB/Negative/--
Gerdau S.A. BBB-/Stable/--
Globo Comunicacao e Participacoes S.A. (GLOBO) BB+/Stable/--
Hypera S.A. BB+/Stable/--
Jalles Machado S.A. BB/Stable/--
JBS S.A. BB+/Stable/--
Klabin S.A. BB+/Stable/--
Localiza Rent a Car S.A. BB+/Stable/--
Lojas Americanas S.A. BB/Stable/B
Minerva S.A. BB/Stable/--
Natura & Co Holding S.A. BB/Stable/--
Natura Cosmeticos S.A. BB/Stable/--
Raizen Combustiveis S.A. BBB-/Stable/--
Raizen Energia S.A. BBB-/Stable/--
Rede D'Or Sao Luiz S.A. BB/Stable/--
Sao Martinho S.A. BBB-/Stable/--
Suzano S.A. BBB-/Stable/--
Tupy S.A. BB/Negative/--
Ultrapar Participacoes S.A. BB+/Stable/--
Vale S.A. BBB-/Stable/--
Votorantim Cimentos S.A. BBB-/Stable/--
Votorantim S.A. BBB-/Stable/--

Colombia

BBB+ BBB-/Negative/A-3
Emgesa S.A. E.S.P. BBB/Negative/--

Curacao

BBB- BBB-/Negative/A-3
First Abu Dhabi Bank USA N.V. AA-/Stable/A-1+
Schlumberger Ltd. A/Negative/A-1

Greece

AAA* BB/Positive/B
Hellenic Telecommunications Organization S.A. BBB-/Stable/A-3

India

BBB+ BBB-/Stable/A-3
HCL Technologies Limited A-/Stable/--
Infosys Ltd. A-/Stable/--
Reliance Industries Ltd. BBB+/Stable/--
Wipro Ltd. A-/Stable/--

Indonesia

BBB+ BBB/Negative/A-2
PT Astra International Tbk BBB+/Negative/--

Italy

AAA* BBB/Stable/A-2
Banca Nazionale del Lavoro SpA BBB+/Stable/A-2
Bank of New York Mellon S.A./N.V. (Italian Branch) A+/Negative/A-1
Barclays Bank Ireland PLC (Milan Branch) A/Stable/A-1
BNP Paribas SA (Milan Branch) A+/Negative/A-1
BNP Paribas Securities Services (Milan Branch) A+/Negative/A-1
Deutsche Bank AG (Milan Branch) BBB+/Positive/A-2
Enel SpA BBB+/Stable/A-2
Eni SpA A-/Negative/A-2
SNAM SpA BBB+/Stable/A-2
Terna SpA BBB+/Stable/A-2

Japan

AA+ A+/Stable/A-1
FUJIFILM Holdings Corp. AA-/Stable/A-1+
Osaka Gas Co. Ltd. AA-/Stable/A-1+
Seven & i Holdings Co., Ltd. AA-/Watch Neg/--
Seven-Eleven Japan Co., Ltd. AA-/Watch Neg/A-1+
Tokyo Gas Co. Ltd. AA-/Negative/A-1+

Jordan

BB B+/Stable/B
Hikma Pharmaceuticals PLC BBB-/Stable/--

Malta

AAA* A-/Stable/A-2
CommBank Europe Ltd. AA-/Negative/A-1+

Mexico

A BBB/Negative/A-2
America Movil S.A.B. de C.V. BBB+/Negative/--
Asigna, Compensacion y Liquidacion BBB+/Negative/A-2
Coca-Cola Femsa S.A.B. de C.V. BBB+/Negative/--
Fomento Economico Mexicano S.A.B. de C. V. A-/Negative/--
Grupo Mexico S.A.B. de C.V. BBB+/Stable/--
Grupo Televisa S.A.B. BBB+/Negative/--
Kimberly-Clark de Mexico S.A.B. de C.V. BBB+/Negative/--
Minera Mexico S.A. de C.V. BBB+/Stable/--
Telefonos de Mexico S.A. de C.V. BBB+/Negative/--

Nigeria

B- B-/Stable/B
Seplat Petroleum Development Company PLC B/Stable/--

Panama

AAA* BBB/Stable/A-2
Autoridad del Canal de Panama A-/Stable/--

Russia

BBB BBB-/Stable/A-3
LUKOIL PJSC BBB/Stable/--
NOVATEK PJSC BBB/Stable/--

South Africa

BB+ BB-/Stable/B
AngloGold Ashanti Ltd. BB+/Positive/--
Gold Fields Ltd. BB+/Positive/B
Sasol Ltd. BB/Negative/B
Telkom SA SOC Ltd. BB/Stable/--

Spain

AAA* A/Negative/A-1
Autonomous Community of Navarre AA-/Negative/--
Autonomous Community of the Basque Country AA-/Negative/--
BNP Paribas Securities Services (Madrid Branch) A+/Negative/A-1
Consorcio de Transportes de Bizkaia AA-/Negative/A-1+
Credit Suisse Securities Sociedad de Valores S.A. A+/Negative/A-1
Historical Territory of Bizkaia AA-/Negative/A-1+

Turkey

BB- B+/Stable/B
Anadolu Efes Biracilik ve Malt Sanayii AS BBB-/Stable/--
Arcelik A.S. BB+/Stable/--
Koc Holding A.S. BB-/Stable/B
Mersin Uluslararasi Liman Isletmeciligi A.S. BB-/Stable/--
Turk Telekom BB-/Stable/B
Turkcell Iletisim Hizmetleri A.S. BB-/Stable/--

Ukraine

B B/Stable/B
Kernel Holding S.A. B+/Stable/--

U.K.

AAA AA/Stable/A-1+
Wellcome Trust AAA/Stable/--

U.S.

AAA AA+/Stable/A-1+
Johnson & Johnson AAA/Negative/A-1+
Microsoft Corp. AAA/Stable/A-1+
*These T&C assessments are for countries that are either members of monetary or currency unions or use as their local currency the currency of another sovereign. Because of this, the assessment shown is based on S&P Global Ratings' analysis of either the monetary authority of the monetary/currency union or the sovereign issuing the currency. Thus, for European Economic and Monetary Union (EMU) members (such as Greece, Ireland, Italy, and/or Spain), the T&C assessments reflect our view of the likelihood of the European Central Bank restricting nonsovereign access to foreign exchange needed for debt service. As for countries that use the currency of another, the T&C assessment of Panama is equalized with that of the U.S.

Table 2

Insurance Ratings That Exceed The Sovereign Rating As Of April 30, 2021
Sovereign Issuer T&C assessment Sovereign FC rating Sovereign LC rating LC financial strength rating

Bahrain

BB- B+/Stable/B B+/Stable/B
Hannover ReTakaful B.S.C. A+/Stable/--

Barbados

B- B-/Stable/B B-/Stable/B
Pacific Life Reinsurance Company II Ltd. AA-/Stable/--
RGA Americas Reinsurance Company, Ltd. AA-/Stable/--
RGA Reinsurance Company (Barbados) Ltd. AA-/Stable/--
Royal Bank of Canada Insurance Co. Ltd. AA-/Stable/--

Bermuda

AA+ A+/Stable/A-1 A+/Stable/A-1
ACE INA Overseas Insurance Company Ltd. AA-/Stable/--
AIA International Limited AA-/Stable/--
AIA Reinsurance Limited AA-/Stable/--
Allianz Risk Transfer (Bermuda) Ltd. AA-/Stable/--
Assured Guaranty Re Ltd. AA/Stable/--
Assured Guaranty Re Overseas Ltd. AA/Stable/--
AXA China Region Insurance Co. (Bermuda) Ltd. AA-/Stable/--
AXA XL Reinsurance Ltd. AA-/Stable/--
Centre Reinsurance (U.S.) Ltd. AA/Stable/--
Chubb Bermuda Insurance Ltd. AA/Stable/--
Chubb INA Overseas Insurance Company Ltd. AA-/Stable/--
Chubb Tempest Life Reinsurance Ltd. AA/Stable/--
Chubb Tempest Reinsurance Ltd. AA/Stable/--
Corporate Officers and Directors Assurance Ltd. AA/Stable/--
Hannover Life Reassurance Bermuda Ltd. AA-/Stable/--
Hannover Life Reassurance Company of America (Bermuda) Ltd. AA-/Stable/--
Hannover Re (Bermuda) Ltd. AA-/Stable/--
HSBC Life (International) Ltd. AA-/Stable/--
Legal & General Reinsurance Co Ltd AA-/Stable/--
Manulife (International) Ltd. AA-/Stable/--
Munich Re of Bermuda, Ltd. AA-/Stable/--
RGA Global Reinsurance Co. Ltd AA-/Stable/--
Top Layer Reinsurance Ltd. AA/Stable/--
XL Bermuda Ltd. AA-/Stable/--

Brazil

BB+ BB-/Stable/B BB-/Stable/B
SCOR Brasil Resseguros SA AA-/Stable/--

China

A+ A+/Stable/A-1 A+/Stable/A-1
Chubb Insurance Company Limited (China) AA-/Stable/--

Colombia

BBB+ BBB-/Negative/A-3 BBB/Negative/A-2
Cardif Colombia Seguros Generales S.A. BBB/Negative/--

Cyprus

AAA* BBB-/Stable/A-3 BBB-/Stable/A-3
Steamship Mutual Underwriting Association (Europe) Ltd. A/Stable/--
The London P&I Insurance Co. (Europe) Ltd. BBB/Negative/--

Ireland

AAA* AA-/Stable/A-1+ AA-/Stable/A-1+
Berkshire Hathaway European Insurance DAC AA+/Stable/--
Zurich Insurance PLC AA/Stable/--

Italy

AAA* BBB/Stable/A-2 BBB/Stable/A-2
Allianz SpA A/Stable/--

Japan

AA+ A+/Stable/A-1 A+/Stable/A-1
Allianz Fire and Marine Insurance Japan Ltd. AA/Negative/--
Chubb Insurance Japan AA-/Stable/--
MetLife Insurance KK AA-/Stable/--

Kazakhstan

BBB BBB-/Stable/A-3 BBB-/Stable/A-3
Eurasia Insurance Co. BBB/Stable/--

Malaysia

A+ A-/Negative/A-2 A/Negative/A-1
Hannover Retakaful Labuan Branch Family A+/Stable/--
Hannover Retakaful Labuan Branch General A+/Stable/--
IAG Re Labuan (L) Berhad AA-/Stable/--

Malta

AAA* A-/Stable/A-2 A-/Stable/A-2
Munich Re of Malta PLC AA-/Stable/--
QIC Europe Ltd. A/Negative/--

Mexico

A BBB/Negative/A-2 BBB+/Negative/A-2
AIG Seguros Mexico S.A. de C.V. A-/Stable/--
AXA Seguros S.A. de C.V. A-/Negative/--
Chubb Seguros Mexico, S.A. BBB+/Negative/--
Nacional Financiera, S.N.C., Institucion de Banca de Desarrollo y Subsidiarias BBB+/Negative/--
SOMPO Seguros Mexico S.A. de C.V. A-/Negative/--
Tokio Marine Compania de Seguros S.A. de C.V. A+/Stable/--

Nigeria

B- B-/Stable/B B-/Stable/B
African Reinsurance Corp. A-/Stable/--

Poland

A+ A-/Stable/A-2 A/Stable/A-1
Towarzystwo Ubezpieczen i Reasekuracji WARTA S.A. A+/Stable/--

Russia

BBB BBB-/Stable/A-3 BBB/Stable/A-2
Insurance Co. of Gaz Industry Sogaz BBB/Stable/--
SCOR Perestrakhovaniye OOO AA-/Stable/--

South Africa

BB+ BB-/Stable/B BB/Stable/B
African Reinsurance Corp. (South Africa) Ltd. A-/Stable/--
AIG Life South Africa Ltd. BB/Stable/--
AIG South Africa Ltd. BB/Stable/--
Allianz Global Corporate and Specialty South Africa Ltd. BB+/Stable/--
General Reinsurance Africa Ltd. AA+/Stable/--
GIC Re South Africa Ltd. BB+/Negative/--
Hannover Life Reassurance Africa Ltd. AA-/Stable/--
Hannover Reinsurance Africa Ltd. AA-/Stable/--
Munich Reinsurance Co. of Africa Ltd. AA-/Stable/--
Old Mutual Life Assurance Co. (South Africa) Ltd. BB/Stable/--
Santam Ltd. BB/Stable/--
SCOR Africa Ltd. AA-/Stable/--
Swiss Re Africa Ltd. AA-/Negative/--

Spain

AAA* A/Negative/A-1 A/Negative/A-1
Credit Suisse Securities Sociedad de Valores S.A. A+/Negative/--
Mapfre Re, Compania de Reaseguros S.A. A+/Stable/--

Thailand

A BBB+/Stable/A-2 A-/Stable/A-2
Bangkok Insurance Public Co. Ltd. A-/Stable/--
New Hampshire Insurance Co. Thailand A+/Watch Neg/--
Sompo Insurance (Thailand) Public Co. Ltd. A/Stable/--
Tokio Marine Safety Insurance (Thailand) Public Co. Lt. A/Stable/--

U.K.

AAA AA/Stable/A-1+ AA/Stable/A-1+
Berkshire Hathaway International Insurance Ltd. AA+/Stable/--

Uruguay

A- BBB/Stable/A-2 BBB/Stable/A-2
MetLife Seguros S.A. BBB+/Stable/--
*These T&C assessments are for countries that are either members of monetary or currency unions or use as their local currency the currency of another sovereign. Because of this, the assessment shown is based on Standard & Poor's analysis of either the monetary authority of the monetary/currency union or the sovereign issuing the currency. Thus, for European Economic and Monetary Union (EMU) members (such as Greece, Ireland, Italy, and/or Spain), the T&C assessments reflect our view of the likelihood of the European Central Bank restricting nonsovereign access to foreign exchange needed for debt service. As for countries that use the currency of another, the T&C assessment of Panama is equalized with that of the U.S.

Related Criteria

Related Research

This report does not constitute a rating action.

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