Score Motion:
Moody’s affirms Ba3 monetary energy score on Export
Insurance coverage Company of Armenia, adjustments outlook to unfavourable
25 March 2022
London, March 25, 2022– Moody’s Traders Service (”Moody’s”) in the present day affirmed the Ba3 international and
local-currency insurance coverage monetary energy scores (IFSRs) on Export Insurance coverage Company of Armenia
ICJSC (EIAA). The outlook modified to unfavourable from secure.
EIAA’s Ba3 IFSRs mirror: (1) its b1 Baseline Credit score Evaluation (BCA), and (2) reasonable chance
of assist from the federal government of Armenia (Ba3 unfavourable), leading to a notch uplift above the BCA.
This score motion on EIAA follows the score motion on the Authorities of Armenia, which on
24 March was affirmed with the outlook modified to unfavourable from secure. (Please see “Moody’s
adjustments Armenia’s outlook to unfavourable from secure; affirms Ba3 score”;
https://www.moodys.com/
analysis/–PR_463997
)
Please consult with the tip of this press launch for a listing of affected scores.
RATINGS RATIONALE
The change in outlook to unfavourable from secure on EIAA, whose scores profit from authorities
assist, mirrors the change in outlook of Armenia’s Ba3 authorities bond score. The unfavourable
outlook displays the potential discount in assist capability of the Armenian authorities and the
robust linkages between EIAA and the Authorities of Armenia. These linkages are primarily based on
EIAA’s (1) dependence on the Armenian financial system for its revenues and working income; and (2)
the corporate’s funding portfolio focus in Armenian authorities bonds and deposits with
Armenian banks.
EIAA is presently the one export insurance coverage firm in Armenia, established by the federal government to
promote Armenian export throughout the framework of the export-oriented industrial coverage of the republic
of Armenia. Moody’s thus maintains a reasonable chance of presidency assist leading to a
one notch uplift above EIAA’s BCA. This takes under consideration the present full possession of EIAA by
the Armenian Authorities, and the Authorities’s involvement within the strategic administration of the
firm in addition to the shortage of any implicit or specific Authorities ensures.
Armenia’s financial system, and thus EIAA, is uncovered to exterior improvement, together with in Russia (Ca
unfavourable) – its largest export market vacation spot and the key originator of remittances and international
direct funding inflows into the nation. The unfavourable outlook on EIAA’s scores due to this fact additionally
displays doubtlessly weaker development prospects in addition to probably materials insurance coverage losses on exports to
Russia.
EIAA has important gross exposures to Russian corporations importing items, predominantly
meals and drinks, from Armenia. As such, Moody’s expects insurance coverage losses to crystalize over
the approaching months with a big influence on the corporate’s underwriting earnings. Nonetheless,
the corporate’s actions to handle these exposures in addition to the numerous 90% quota share
reinsurance safety supplied by Swiss Reinsurance Firm Ltd (Aa3 IFSR secure) will restrict the
hostile influence on EIAA’s capital.
The Score Company additionally expects that the Russia-Ukraine army battle might result in discount
in EIAA’s new enterprise alternatives and premiums provided that over 90% of EIAA’s premiums are
generated on Russian exports.
OUTLOOK
The outlook on EIAA is unfavourable, consistent with the outlook on the Authorities of Armenia. The outlook
additionally displays uncertainty across the firm’s new enterprise flows over the approaching months and
how which may influence the baseline credit score evaluation of the insurer, in gentle of the Russia/Ukraine
battle.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
EIAA’s IFRS is presently aligned with the score on the federal government of Armenia, which limits upward
potential, notably given the unfavourable outlook on the sovereign.
Conversely, the score might be downgraded in case of the downgrade of the sovereign score,
decrease assist assumption, or weaker stand-alone evaluation of the corporate. The stand-alone
evaluation might be downgraded because of: (1) a cloth deterioration in capital, with
shareholders fairness as a proportion of web exposures rising in direction of 100%; and/or (2) a
important discount within the firm’s use of reinsurance on future enterprise or any claims disputes
on the present reinsurance contract.
LIST OF AFFECTED RATINGS
Issuer: Export Insurance coverage Company of Armenia ICJSC
Affirmations:
….Insurance coverage Monetary Energy Scores, Affirmed Ba3
….Baseline Credit score Evaluation, Affirmed b1
Outlook Motion:
….Outlook, modified to unfavourable from secure
PRINCIPAL METHODOLOGIES
The methodologies utilized in these scores have been Commerce Credit score Insurers Methodology printed in
November 2019 and obtainable at
https://www.moodys.com/researchdocumentcontentpage.aspx?
docid=PBC_1187570
, and Authorities-Associated Issuers Methodology printed in February
2020 and obtainable at
https://www.moodys.com/researchdocumentcontentpage.aspx?
docid=PBC_1186207
. Alternatively, please see the Score Methodologies web page on www.moodys.com
for a duplicate of those methodologies.
REGULATORY DISCLOSURES
For additional specification of Moody’s key score assumptions and sensitivity evaluation, see
the sections Methodology Assumptions and Sensitivity to Assumptions within the disclosure
type. Moody’s Score Symbols and Definitions could be discovered at:
https://www.moodys.com/
researchdocumentcontentpage.aspx?docid=PBC_79004
.
For scores issued on a program, sequence, class/class of debt or safety this announcement
offers sure regulatory disclosures in relation to every score of a subsequently issued bond or
be aware of the identical sequence, class/class of debt, safety or pursuant to a program for which the
scores are derived solely from current scores in accordance with Moody’s score practices.
For scores issued on a assist supplier, this announcement offers sure regulatory disclosures
in relation to the credit standing motion on the assist supplier and in relation to every explicit credit score
score motion for securities that derive their credit score scores from the assist supplier’s credit standing.
For provisional scores, this announcement offers sure regulatory disclosures in relation to the
provisional score assigned, and in relation to a definitive score which may be assigned subsequent
to the ultimate issuance of the debt, in every case the place the transaction construction and phrases haven’t
modified previous to the task of the definitive score in a fashion that will have affected the
score. For additional data please see the scores tab on the issuer/entity web page for the respective
issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit score assist from the first entity(ies)
of this credit standing motion, and whose scores might change because of this credit standing motion, the
related regulatory disclosures will likely be these of the guarantor entity. Exceptions to this strategy
exist for the next disclosures, if relevant to jurisdiction: Ancillary Providers, Disclosure to rated
entity, Disclosure from rated entity.
The scores have been disclosed to the rated entity or its designated agent(s) and issued with no
modification ensuing from that disclosure.
These scores are solicited. Please consult with Moody’s Coverage for Designating and Assigning Unsolicited
Credit score Scores obtainable on its web site www.moodys.com.
Regulatory disclosures contained on this press launch apply to the credit standing and, if relevant, the
associated score outlook or score overview.
Moody’s common rules for assessing environmental, social and governance (ESG) dangers in
our credit score evaluation could be discovered at
http://www.moodys.com/researchdocumentcontentpage.aspx?
docid=PBC_1288235
.
The World Scale Credit score Score on this Credit score Score Announcement was issued by one among Moody’s
associates outdoors the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt
am Principal 60322, Germany, in accordance with Artwork.4 paragraph 3 of the Regulation (EC) No
1060/2009 on Credit score Score Businesses. Additional data on the EU endorsement standing and on the
Moody’s workplace that issued the credit standing is on the market on www.moodys.com.
Please see www.moodys.com for any updates on adjustments to the lead score analyst and to the
Moody’s authorized entity that has issued the score.
Please see the scores tab on the issuer/entity web page on www.moodys.com for extra regulatory
disclosures for every credit standing.
Helena Kingsley-Tomkins
VP-Senior Analyst
Monetary Establishments Group
Moody’s Traders Service Ltd.
One Canada Sq.
Canary Wharf
London
United Kingdom
JOURNALISTS: 44 20 7772 5456
Shopper Service: 44 20 7772 5454
Simon James Robin Ainsworth
Affiliate Managing Director
Monetary Establishments Group
JOURNALISTS: 44 20 7772 5456
Shopper Service: 44 20 7772 5454
Releasing Workplace:
Moody’s Traders Service Ltd.
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JOURNALISTS: 44 20 7772 5456
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