Moody's Reports Cuba Credit Profile Issuing Rating Is Caa2

Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Government of Cuba

Global Credit Research - 08 Dec 2020

New York, December 08, 2020 -- Moody's Investors Service ("Moody's") reviews all of its ratings periodically in accordance with regulations -- either annually or, in the case of governments and certain EU-based supranational organisations, semi-annually. This periodic review is unrelated to the requirement to specify calendar dates on which EU and certain other sovereign and sub-sovereign rating actions may take place.

Moody's conducts these periodic reviews through portfolio reviews in which Moody's reassesses the appropriateness of each outstanding rating in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. Since 1st January 2019, Moody's issues a press release following each periodic review announcing its completion.

Moody's has now completed the periodic review of a group of issuers that includes Cuba and may include related ratings. The review did not involve a rating committee, and this publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future; credit ratings and/or outlook status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

The credit profile of Cuba (issuer rating Caa2) is supported by the country's "b3" economic strength, reflecting the moderate size of the economy and low growth underpinned by a narrow economic base; Cuba's "caa2" institutions and governance strength, reflecting the lack of available and timely economic data, as well as a very weak track record of timely and full debt repayment; its "baa2" fiscal strength, taking account of the government's moderate debt burden and limited debt affordability pressures, although additional liabilities are likely but not confirmable because of the lack of available data; and its "b" susceptibility to event risk, reflecting very high external vulnerability risk due to strained external finances owing to the loss of Venezuelan financial support and lower tourism receipts.

This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was Sovereign Ratings Methodology published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.