Serbia’s finance minister expects other agencies to follow S&P Global Ratings in awarding the country an investment grade credit rating.
S&P moved Serbia’s long-term sovereign rating one notch higher to BBB- from BB+ on Friday, lifting its foreign-currency bonds out of junk status for the first time.
That came after S&P changed its outlook on Serbia’s credit to positive from stable in April, a move that was followed in August by Fitch Ratings and Moody’s Ratings.
“In the next six months, we anticipate that the other two big rating agencies may act,” Finance Minister Sinisa Mali told reporters at his offices in Belgrade on Saturday. “I expect at least one of them to confirm the investment grade.”
The move follows efforts by the biggest former Yugoslav republic to shore up public finances and catch up with its neighbors after years lost to war and strife. The candidate nation to join the European Union remains a speculative-grade credit at Fitch and Moody’s.
Mali said that for more than a year, spreads on Serbia’s government bonds were more indicative of an investment grade rating.
“With this confirmation, we open a whole new perspective for new investors,” the minister said, adding that it will help to lower borrowing costs.
He declined to comment on any potential bond issuance, but said Serbia had about 700 billion dinars ($6.5 billion) of liquidity, with public debt standing at 46.5% of gross domestic product.
Source: Bloomberg, Momentum
