Moody’s credit rating agency has increased Lebanon’s bond rating to B2 from B3. This means that the capacity for Lebanon to honor its debt obligation is stronger in the eyes of the ratings agency. A stronger rating enables a country to borrow money at lower interest rates because of the perception of lower risk.
“Lebanon’s public finances have proven remarkably resistant to serious political and economic shocks in recent years,” Tristan Cooper, lead sovereign analyst for Lebanon within Moody’s Sovereign Risk Group, said in a statement. “This is due to the resilience of the country’s banking system, which is the government’s primary creditor.”
The timing of the ratings boost for Lebanon is interesting, coming just two months before the parliamentary elections. Its would seem prudent for Moody’s to have waited until after the election results are known, but the decision not to wait must be a reflection of Moody’s confidence in its analysis.
