Fitch Ratings would provide sovereign credit rating of Bangladesh as the government yesterday allowed the central bank to sign agreement with the New York-based global rating agency.
They would work on the ratings for the country besides existing two agencies – Standard & Poor’s and Moody’s – which are providing the ratings since 2010.
“We’ve given permission to Bangladesh Bank to go for the agreement with Fitch Ratings yesterday,” said a senior official of the Banking and Financial Institutions Division of the Ministry of Finance.
It would facilitate the country to be rated by three different agencies and thus increasing the credibility to make it easy getting foreign capital and credit, he said. Fitch Ratings would rate the country for the years 2014 and 2015 subject to signing of the agreement.
The ratings would be free of initial cost as proposed by the agency, but fees would be required if the country issues any bond rated by the company during the two-year period, according to a Bangladesh Bank letter to the banking division seeking permission for the agreement.
Expressing the interest, Fitch Ratings argued that 92% of the countries having GDP over US$50bn are rated by three agencies.
Bangladesh Bank Deputy Governor Abu Hena Mohammed Raji Hasan said the company had earlier showed interest to rate Bangladesh.
Standard and Poor’s and Moody’s in their latest reviews on Bangladesh rated the BB- and Ba3 respectively and kept its “stable outlook” for the fourth consecutive year.
Fitch Ratings is dual-headquartered in New York, USA and London, UK. It was one of the three nationally recognised statistical rating organisations (NRSRO) designated by the US Securities and Exchange Commission in 1975, together with Moody’s and Standard & Poor’s. The three are commonly known as the “Big Three credit rating agencies.”
Sources in the finance division said the government revived its plan to issue a sovereign bond for raising funds from the international money market in less than 10 months into shelving a previous attempt in the face of criticisms.
Officials, however, said the government revived the plan for taking loans from the international money market against the backdrop of a shrinking amount of soft loans handed out by multilateral lending agencies and a lower-than-expected foreign direct investment.
Besides, the government failed to get released soft loans with
US$3bn freezing in the pipeline because of stringent conditions by the donors.
