Credit Risk Rating Changes Q Apr - Jun 2013

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1 Credit Risk Rating Changes Q Apr - Jun 2013 The risk ratings for Q indicate that 5 countries have been upgraded and 12 countries have been downgraded. Country Change Extended WW Headline Thailand D&B upgrades Thailand's country risk rating amid strong quarterly growth and a stable outlook. Latvia D&B upgrades Latvia's country risk rating amid a strong economic performance and high euro introduction probability. Lebanon D&B downgrades Lebanon's country risk rating as a result of the Syrian civil war and the prime minister's resignation.

2 Iceland D&B upgrades Iceland's country risk rating in reflection of the continued economic recovery. Italy D&B downgrades Italy's country risk rating amid downbeat political developments. Ghana D&B downgrades Ghana's country risk rating due to consistently weak macroeconomic data. Jordan D&B downgrades Jordan's country risk rating due to persistently weak macroeconomic data and continuing political tension. Netherlands D&B downgrades Netherland's country risk rating due to rapidly falling house prices and their impact on the economy. Bosnia & Herzegovina D&B upgrades Bosnia s country risk rating as external economic risk decline.

3 Iran D&B downgrades Iran s country risk rating as political uncertainty persists. France D&B downgrades France s country risk rating as the government abandons the EU-mandated fiscal target. Morocco D&B downgrades Morocco's country risk rating amid rising political concerns and external economic uncertainty. Canada D&B downgrades Canada's country risk rating due to weak export revenues and a contraction in housing market activity. El Salvador D&B downgrades El Salvador's country risk rating as the economic outlook worsens. Belgium D&B downgrades Belgium's country's risk rating amid sharply rising insolvency risks.

4 Turkey D&B downgrades Turkey's country risk rating in the face of continued anti-government protests. New Zealand D&B upgrades New Zealand's country risk rating amid substantial fiscal retrenchment. Risk Rating Explanations The DB risk indicator is divided into seven bands, ranging from DB1 through DB7. Each band is subdivided into quartiles (a-d), with an a designation representing slightly less risk than a b designation and so on. Only the DB7 indicator is not divided into quartiles. Indicator Meaning Explanation DB1 Lowest Risk Lowest degree of uncertainty associated with expected returns, such as export payments, and foreign debt and equity servicing. DB2 Low Risk Low degree of uncertainty associated with expected returns. However, country-wide factors may result in higher volatility of returns at a future date. DB3 Slight Risk Enough uncertainty over expected returns to warrant close monitoring of country risk. Customers should actively manage their risk exposures.

5 DB4 Moderate Risk Significant uncertainty over expected returns. Risk-averse customers are advised to protect against potential losses. DB5 High Risk Considerable uncertainty associated with expected returns. Businesses are advised to limit their exposure and/or select high-return transactions only. DB6 Very High Risk Expected returns subject to large degree of volatility. A very high expected return is required to compensate for the additional risk or the cost of hedging such risk. DB7 Highest Risk Returns are almost impossible to predict with any accuracy. Business infrastructure has, in effect, broken down. Copyright 2013 D&B Singapore. All rights reserved