Book 4_Fixed_READING 63_CREDIT ANALYSIS FOR GOVERNMENT ISSUERS

Question 1

The five qualitative factors relevant for assessing sovereign debt are

Answer 1

(1) government institutions and policy,
(2) fiscal flexibility,
(3) monetary effectiveness,
(4) economic flexibility,
(5) external status

Question 2

The three quantitative factors relevant for assessing sovereign debt

Answer 2

(1) fiscal strength,
(2) economic growth and stability,
(3) external stability

Question 3

Non-sovereign government debt issuers includ

Answer 3

• Agencies,
• Government sector banks,
• Supranational entities,
• And regional governments

Question 4

Major types of regional government bonds include

Answer 4

• General obligation (GO) bonds, backed by tax-raising powers,
• Revenue bonds, issued to fund a specific project.

Question 5

Debt affordability ratios

Answer 5

compare interest payments to GDP or revenue

Question 6

Debt burden ratios

Answer 6

measure the level of sovereign debt relative to GDP or tax revenue