The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Debt: Market round-up

GREs get a pick-up from rating change Government-related entities (GREs) got a substantial lift from Moody's Investors Service when the credit rating agency

introduced a new methodology that seeks formally to incorporate implicit support into GREs where a government is an owner or provides some support.

Moody's has introduced a joint-default analysis for corporates, which are defined as "entities with full or partial government ownership or control, a special charter, or a public-policy mandate from a national or local government".

State shareholder support has always been incorporated to some degree but now there is a formal method that carves the rating into four components. The first is the pure credit risk analysis, the second takes into account the credit risk of the relevant government, the third is the default dependence between the two, and the fourth assesses the likelihood of government support. The joint default analysis resulted in 24 entities receiving an upgrade.

 "We have known for years that joint default risk plays a role in assessing credit. That approach was already incorporated into structured finance analysis but Moody's hesitated in introducing that into company rating analysis," says Jerome Fons, managing director of Moody's credit policy committee.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree