Fitch Assigns Pakistan's Proposed USD Bonds 'B-' Rating

March 30, 2021: Fitch Ratings has assigned Pakistan's (B-/Stable) proposed foreign-currency bonds a 'B-' rating.

KEY RATING DRIVERS

The rating is in line with Pakistan's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'B-' with a Stable Outlook.

Fitch affirmed Pakistan's Long-Term Foreign- and Local-Currency IDRs on 17 August 2020.
RATING SENSITIVITIES

The rating on the proposed bonds is sensitive to any changes in Pakistan's Long-Term Foreign-Currency IDR.

The following were the rating sensitivities for the sovereign rating published in the rating action commentary in August 2020.

The main factors that could, individually or collectively, lead to positive rating action/upgrade are:

- External Finances: Continued implementation of policies sufficient to facilitate the rebuilding of foreign-exchange reserves and ease external financing risks.

- Public Finances: Sustained fiscal consolidation, for instance through a structural improvement in revenue, sufficient to put the debt/GDP ratio on a downward trajectory over the medium term.

- Macro: Sustained improvements in the business environment that contribute to improved medium-term growth and export prospects.

The main factors that could, individually or collectively, lead to negative rating action/downgrade:

- External Finances: Indications of reduced access to external finance leading to financing strains.

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