Standard Chartered, Citi to Advise on Credit Rating

By Kyaw Hsu Mon 12 August 2015

RANGOON — The Burmese government has enlisted the advisory services of banking giants Citi and Standard Chartered as the country seeks its first ever classification from the world’s big three credit rating agencies.

The firms are expected to help improve the collection of economic data and communication between foreign investors and the country’s financial institutions.

No timeline has been set for achieving the rating, which is expected to hinge on how long it will take the government to provide relevant information on economic activity within the country.

Zaw Lin Htut, chairman of the Myanmar Payment Union, told The Irrawaddy that Burma’s push for a credit rating would bring positive developments in both foreign investment and the strength of local financial institutions.

“If foreign investors know more information about the financial situation and banking sector through these ratings advisers, they will find it easier to get inside the country,” he said. “We can expect the banking sector to become more developed as well.”

The move is expected to improve investor confidence in Burma at a time when foreign capital inflows have increased dramatically. More than $8 billion of foreign direct investment was pledged in the 2014-15 fiscal year, up from $3.5 billion in 2013-14.

According to a government statement, Citi and Standard Chartered were chosen because of their experience in providing credit rating advisory services for similar emerging markets.

“Citi had a branch presence in Myanmar from 1919 to 1942, and we very much look forward to re-engaging and supporting the further development of this exciting growth market,” said Darren Buckley, Citi’s country officer for Thailand, Burma, Cambodia and Laos.

Much of the consulting is expected to focus on training and capacity building. Once a credit rating is secured, the Central Bank of Myanmar is expected to issue bonds to underwrite a number of backlogged infrastructure projects.

Laos and Burma are the only two Asean countries lacking a credit rating from Standard & Poor’s, Fitch and Moody’s. Burma’s credit rating is expected to debut below investment grade, on par with the regional economies of Vietnam, Indonesia and the Philippines.