Maldives goes for a sovereign rating

September 25, 2007 (LBO) — The Indian Ocean Island of Maldives hopes to use its upcoming sovereign rating to help local firms raise cash in international markets, the atoll’s finance minister said.

A sovereign or country rating serves as an indication of a nation’s ability to repay its debt and is a key requirement to raise money from the international capital markets.

“We have appointed Standard & Poor’s rate our country’s creditworthiness,” Finance Minister Gasim Ibrahim said. “The government has no immediate plans to use the rating and raise money overseas. But the thinking behind a rating is to set an indicative benchmark for Maldivian companies who plan to raise money abroad.”

The Maldives recently announced plans seeking international investors to build 10 regional airports to support 35 new island resorts that are being developed. The new resorts will help raise the local hotel industry’s bed capacity to 23,000 within the next three years from 20,000 now.

Investors are expected to inject 120 million dollars within the next 10 years, some into exclusive villas that charge in excess of 30,000 dollars a night, pampering to the rich and famous. Analysts expect a sovereign ratin