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Citi and StanChart set to advise Myanmar on first credit rating Citi and StanChart set to advise Myanmar on first credit rating

Citi and StanChart set to advise Myanmar on first credit rating

Citi and StanChart set to advise Myanmar on first credit rating

HONG KONG (Reuters) – Citigroup Inc (C.N) and Standard Chartered Plc (STAN.L) are set to advise Myanmar on its first credit rating, according to people with direct knowledge of the matter, paving the way for the country to issue its maiden international bond.

After decades of isolation from international capital markets under military rule, Myanmar faces a widening current account deficit that could be bridged by borrowing once it has a credit rating from agencies such as Fitch, Moody’s or Standard & Poor’s.

None of the big three agencies have currently assigned Myanmar a rating, which professional investors use as a benchmark of a country’s ability to repay debt.

“Getting a credit rating is of the first importance for Myanmar, helping it to clean up its public finances,” said Sean Turnell, a professor at Macquarie University in Sydney who has advised the U.S. Congress on Myanmar’s economy.

“It’s also important symbolically, sending the signal the country is…not the land of caprice it was so often in the past.”

Citi and StanChart will this month be given a formal mandate to advise the Southeast Asian nation on the steps necessary to earn the credit rating, one of the sources said, declining to be identified because the matter was not yet public.

An official from the Central Bank of Myanmar said he was aware of the credit rating mandate, but could not elaborate further.

The process can take up to a year, the sources said, as the banks help a country with the technical steps necessary to meet the agencies’ criteria for a given rating. Once the rating is assigned, the country can then use the benchmark to market bonds to international investors.

Myanmar would, in common with other debut issuers, likely aim for a ‘benchmark’-sized bond of around $1 billion once it has a rating, one of the sources said.

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Source: Yahoo Finance 

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