Page 34 - GEORptFeb19

S&P affirms Georgia’s BB-/B saying growth set to remain strong
S&P Global Ratings on May 4 affirmed the ‘BB-/B’ ratings of Georgia and said the outlook was stable. Georgia's growth is set to remain strong and its IMF programme should mitigate balance of payment risks and act as a fiscal policy anchor, the rating agency said. The update refers to the country's long and short-term foreign and local currency sovereign credit ratings.
Preliminary data showed GDP accelerated through the first quarter of this year, rising from 4.4% in January and 5.5% in February, to average at 5.2% y/y for the quarter. The expansion in March was driven by a rise in activity in manufacturing, transport, real estate and trade, and “other community, social and personal service activities”.
The statistics office also released preliminary data on Georgia’s external trade, showing that exports were up 28.4% to $740.3mn, while imports rose 21.6% to $2.0834bn.
8.4.1 International ratings - specific details of rating actions corp/regional etc
Fitch rating agency on November 22 revised Georgian Railway's outlook to Positive from Stable while affirming the entity's long-term foreign and local currency Issuer Default Ratings (IDRs) at B+. The move reflected a similar change in the sovereign outlook, introduced in September.
Fitch said that it did not expect changes to Georgian Railway’s legal status in the medium term. The government has plans to privatise 25% of the company, and while the exact timing of that was not yet defined, it should be neutral for the company's links with the state, the rating agency reasoned.
Georgian Railway is a large external borrower in Georgia's context with a 29% share in eurobond issues, acting as a quasi-funding vehicle for government investments , Fitch explained. As of end-September 2018, Georgian Railways eurobonds accounted for $1.3bn, or about 76% of the total eurobonds of Georgian issuers. A default by Georgian Railway could significantly impair the borrowing capacity of the government due to Georgia's reliance on external financing and the small size of its domestic economy.
8.5 Fixed income
8.5.1 Fixed income - bond news
EBRD issues €600mn global green bond
The European Bank for Reconstruction and Development (EBRD) issued its debut €600mn euro-denominated global green bond at the beginning of January.
“This transaction represents the EBRD’s inaugural benchmark Green Bond in the EUR market, and its fourth benchmark-sized Green Bond,” the bank said in a January 4 s tatement .
34 GEORGIA Country Report February 2019 www.intellinews.com