Coface reduced Romania’s rating, from “A4 minus” to “B”, within the context of this group reducing ratings or providing negative outlooks for 47 states, since the lending shortage has deepened in all fields.
As part of the evaluation released yesterday, Coface reduced most of the ratings of states by one degree, and also by two degrees in case of countries more seriously affected, such as Spain, UK and Ireland. There are only a few zones, such as India, Brazil, China, Middle East and North Africa, which remained at the previous risk level, based on a press release issued by Coface. In January 2009, Coface maintained Romania’s rating to “A4 minus” but the company representatives drew the attention to the high budgetary deficit from 2008 and to the high level of the current account deficit. Thus, Romania returned to the rating granted by the company in 2005. The country rating for Romania, granted by the assessment agency, was improved, in December 2005, from “B positive” to “A4”.
Based on Coface classification, “B” rating stands for an instable economic and political environment, which could continue to affect a payment history already poor. “The payment conduct of the Romanian companies deterred significantly since October 2008. The payment failure incidents advanced, on average, by more than 500 per cent compared to an average level over the first nine months of 2008. The violent shock induced by the crisis over companies resulted in a record number of bankruptcies in 2008, by 120 per cent more than in 2007, which is expected to intensify in 2009. Basically, all companies relying on banking funds or one external funding were deeply affected, in case of many, the disruption in the working of these “apparatus” leading to collapse, with effects on all their lenders,” Cristian Ionescu, Coface Romania general manager, said in the press release.