Standard & Poor’s on Wednesday assigned Libya an investment grade rating in the country’s first ever sovereign credit rating, a major boost for the North African nation in its re-emergence on the international business scene after decades of U.S.-imposed sanctions.
In assigning the rating, S&P highlighted the OPEC member state’s strong balance sheet and solid energy sector growth prospects, and said the country’s outlook was stable. But S&P analyst Ben Faulks also raised questions about transparency in Libya and uncertainty surrounding ongoing reform efforts to promote private sector development.
“We believe Libya’s economic structure is not as developed as most peers with, for example, the banking sector in the early stages of modernization,” Faulks said in a statement.
S&P assigned Libya a long-term foreign and local currency credit rating of “A-,” a short-term foreign and local currency rating of “A-2” and a transfer and convertibility assessment of “A-.” Ratings in the “A” category indicate the issuer has a strong capacity to meet financial commitments, but is somewhat susceptible to adverse economic conditions and changes in circumstances.
Libya’s Central Bank said the announcement reflected the country’s ability to continue to strong growth, which averaged about 8 percent between 2003 and 2008…read more