Glossary: FI Module 15 — Credit Analysis: Government Issuers
| Term | Definition |
|---|---|
| Sovereign credit analysis | Evaluating a national government’s ability and willingness to service its debt |
| Fiscal strength | A government’s capacity to generate revenue through taxation and other sources |
| Debt burden | The ratio of government debt to GDP or revenue; indicates sustainability |
| Debt affordability | The ability to service debt from current revenues (interest/revenue ratio) |
| Institutional framework | The quality of governance, rule of law, and policy credibility in a country |
| Economic resilience | The ability of the economy to absorb shocks and sustain growth |
| General obligation (GO) bond | A municipal bond backed by the full taxing authority of the issuer |
| Revenue bond | A municipal bond repaid from a specific revenue source (tolls, fees, utility charges) |
| Supranational bond | A bond issued by a multilateral institution (World Bank, IMF, EIB); typically AAA-rated |
| Willingness to pay | A sovereign’s political willingness (not just ability) to meet debt obligations |
See also: Credit Risk