. All rights reserved. Credit Impact Scores communicate the impact ESG considerations have on an entity's credit rating. The most notable regulatory and economic reforms include removing restrictions on 100% foreign ownership for most sectors, and a broad suite of new laws and regulations relating to government tenders and procurement, commercial mortgages, bankruptcy proceedings, expedited customs clearance, immigration policies, and tourism, as well as various laws enhancing women's participation in the economy and promoting gender equality. The sovereign's economic resilience is underpinned by its improving institutional capacity to adjust to shocks, as demonstrated during the past years in response to structural and cyclical oil price shocks. In order to incorporate all . As global issuance of green, social, sustainability and sustainability-linked bonds swings back to growth this year, macroeconomic and market uncertainties and greater scrutiny over perceived greenwashing will temper the pace of recovery. While most of the diversification projects unveiled to date are concentrated in the field of urban development, tourism and entertainment, the growing list also includes industrial ventures, spanning from petrochemicals, non-hydrocarbon mining and low-carbon energy alternatives such as blue and green hydrogen to defense and electric vehicle manufacturing, broadening the scope of diversification efforts across the full economic spectrum. Jim Hempstead is a Managing Director in Moodys Global Project & Infrastructure Finance Group, where he heads both the North American Regulated Utility & Power Team and the North American Public Infrastructure Team. The evidence of progress in diversifying the economy as captured by economic data is still tentative, given the initial stages of implementation. New ESG scores assist in transparently and systematically demonstrate the impact of ESG on credit ratings. 2023 Moody's Investors Service, Inc., Moodys Analytics, Inc. and/or their affiliates and licensors. Today's rating action also affirms the A1 backed senior unsecured ratings of KSA Sukuk Limited, and its (P)A1 backed senior unsecured medium-term note program rating. Sovereign Risk Group visit our web site at www.moodys.com. If this isn't what you are looking for, you can. Jeff is a Certified Public Accountant. 2023 Moody's Investors Service, Inc., Moodys Analytics, Inc. and/or their affiliates and licensors. The government is making progress in implementing its broad-based structural reform agenda, which will support the sustainability of the economic diversification efforts over the medium and long term. By continuing to access this document from within Australia, you represent to MOODYS that you are, or are accessing the document as a representative of, a wholesale client and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to retail clients within the meaning of section 761G of the Corporations Act 2001. Gender diversity on boards linked to credit quality, especially in North America, Europe. Sustainable Finance and Second Party Opinions, Sustainable bond issuance poised to rebound 10% in 2023 to about $950 billion, short of record high. Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. ESG credit scores by Fitch Ratings, S&P Global Ratings and Moody's Investors provide a description of how the ESG factors have relevance to or impact on the final credit rating, according to the . He Is responsible for a portfolio consisting of electric and gas utilities. 8 In recent years, large companies have been more willing to embrace debt as part of an effort to increase perceived value by shareholders. By clicking I AGREE, you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moodys information that becomes accessible to you (the Information). 0800-666-3506. Saudi Arabia's ESG Credit Impact Score is moderately negative (CIS-3), reflecting highly negative exposure to environmental risks and moderately high social risks, which are partly contained by institutions and governance strength and economic resilience, including the availability of financial resources in the form of sovereign wealth fund assets that can be used to absorb shocks. SEE APPLICABLE MOODYS RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODYS CREDIT RATINGS. in Computer Science and Mathematics from Mount Holyoke College. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. The government debt burden was moderate at less than 25% of GDP (78% of revenue) at the end of 2022 and its debt affordability was very high, stronger than the medians of Aa-A rated peers. Sustainable project finance bank loans tend to have lower default rates than non-sustainable project finance bank loans, based on our analysis of the infrastructure, power, and oil and gas sectors. Associate Managing Director While Moody's, S&P and Fitch Ratings control approximately 95% of the credit ratings business, [14] they are not the only rating agencies. The credit impact of these risks is most pronounced among corporate, sovereign and sub-sovereign issuers. ESG credit scores by Fitch Ratings, S&P Global Ratings and Moody's Investors provide a description of how the ESG factors have relevance to or impact on the final credit rating, according to the . For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology. Moody's integrates ESG considerations into the credit analysis of the companies, including each entity's risk exposure and the degree of credit impact. These ratings are solicited. 4. By providing your information, you will also receive emails from Moodys Corporation and itsaffiliatesregarding our business, products and services. Saudi Arabia is also one of the world's most arid states and rapid economic and population growth in recent decades have increased challenges surrounding water sustainability. Understanding the Issuer Profile Scores (IPS) and the Credit Impact Scores (CIS). MIS expands ESG issuer profile and credit impact scores across more enterprise. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. Second Party Opinion assessment framework. In 1992, 98 U.S. companies held an AAA credit rating from Standard & Poor's, according to The Financial Times. Paris, March 17, 2023 -- Moody's Investors Service (Moody's) has today changed the outlook on the Government of Saudi Arabia to positive from stable and affirmed its long-term issuer and senior unsecured ratings at A1. The enormous environmental cost of mining crypto is one of the major barriers to widespread adoption and has prompted some calls for authorities to ban crypto mining altogether. Although a growing focus on natural capital and biodiversity is raising policy risks for sectors with elevated exposure to these considerations, the treaty's ultimate credit effect will hinge on the implementation and enforcement of pledges at the country level. Credit ratings, research, and risk analysis provider Moody's Investors Service announced today that it has expanded its ESG profile and credit impact scores to several new industries and sectors, including consumer products, beverages, shipping, manufacturing, aerospace & defense, financial institutions, large US counties and European public sector housing. MOODYS ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. As a senior member of the analytical team, Graham has contributed to and/or coordinated a number of publications, in particular on energy market issues, and is a frequent speaker at investor events. The LC country ceiling at Aa2, two notches above the sovereign rating, incorporates reliance on a single revenue source for the government and non-government issuers and geopolitical risk, partly mitigated by relatively predictable institutions and external balance of payments stability. Companies in different sectors have had limited credit implications from Peru's sociopolitical environment, but persistent unrest will imply greater damage to companies' credit metrics. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODYS PRIOR WRITTEN CONSENT.MOODYS CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.All information contained herein is obtained by MOODYS from sources believed by it to be accurate and reliable. All of these reforms will contribute to improving Saudi Arabia's competitiveness and enhancing its appeal as destination for private and foreign investment, thereby, over time, increasing its growth potential and economic resilience. Our scores provide greater transparency about how we incorporate ESG considerations into credit ratings. Jeffrey Cassella is a Vice President - Senior Credit Officer in Moodys Global Infrastructure Finance Group, joining the Utilities team at the beginning of 2013. The RFC will introduce considerations for the assignment of ESG scores to structured finance transactions. Climate change, which is driving more frequent and increasingly severe natural catastrophes, is a growing threat to reinsurers because they accumulate losses from primary companies. Moody's - New scores depict varied, often credit-negative impact of ESG factors for sovereigns 18 January 2021 London, January 18, 2021 -- Moody's new ESG issuer profile and credit impact scores provide greater clarity, consistency and differentiation on risk exposure, degree of credit impact Stabilizing macroeconomic conditions in Asia-Pacific countries, coupled with a policy and regulatory focus on green and transition finance, will bolster ESG-labeled bond volumes in 2023. Saudi Arabia's strong institutions and governance strength support its positive G-1 issuer profile score. Prior to joining Merrill Lynch, Jim worked with Salomon Smith Barney Corporate Finance, working in their Global Energy &Power Group. Robust population dynamics will continue to drive rapid growth in the labor force over the coming decades creating pressure to generate job opportunities for the citizens. Prior to joining Moodys in 2002, Jim was an investment banker with Merrill Lynch & Co., working in the Global Energy & Power Group, providing financial and advisory services to electric, natural gas distribution, interstate pipeline, energy merchant, water and energy technology companies. climate change scenarios with financial analysis. You can also email us at [emailprotected] or Prior to joining Moodys in 2015, Graham was City Advisor to Ofwat, the English and Welsh water regulator, through the 2014 Price Review. You have reached the daily limit of Research email sharings. Fed's pilot climate scenario analysis will yield useful insights for banks. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. 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