Sovereign credit ratings during the Covid-19 pandemic

This paper is the first to investigate the response of the three largest credit rating agencies to Covid-19, & finds that the economic outlook of a country & government’s response to the health crisis, & not the severity of the pandemic itself, determines the intensity of negative rating actions.


Using 603 sovereign rating actions by the three leading global rating agencies between January and March 2021, we show that severity of sovereign ratings actions is not affected by the intensity of the Covid-19 health crisis (proxied by case and mortality rates).

This report finds that economic repercussions of the pandemic such as economic outlook of a country and governments’ response to the health crisis, and not the severity of the pandemic itself, determine the intensity of negative rating actions.

Contrary to expectations, credit rating agencies pursued mostly a business-as-usual approach and reviewed sovereign ratings when they were due for regulatory purposes rather than in response to the rapid developments of the pandemic.

Despite the disappointing reaction to the ongoing pandemic, sovereign rating news from S&P and Fitch still conveyed price-relevant information to the bond markets.

Read the blog by Dr Moritz Kraemer


  • About the author

    Dr Patrycja Klusak, Affiliated Researcher

    Dr Patrycja Klusak is a lecturer in Banking and Finance at University of East Anglia and an Affiliated Researcher at Bennett Institute for Public Policy at the University of Cambridge.   Learn more

    Patrycja Klusak
  • About the author

    Dr Huong Vu

    Dr Huong Vu is a Lecturer in Finance at University of Aberdeen. She joined the University of Aberdeen in September 2018. Prior to that, Dr Huong Vu had three years of experience as a lecturer in finance at Coventry Business School. Dr Huong Vu got her Bachelor Degree in Economics from the Foreign Trade University, Vietnam in 2006. Then, she did her Master Degree and PhD in Finance at Bangor Business School, Bangor University from 2008 to 2014. Dr Huong Vu's PhD research addressed the causes and implications of split sovereign credit ratings for financial markets. In recent years, her research interests span different areas of finance including sovereign credit risk, credit ratings and corporate finance.

  • About the author

    Dr Moritz Kraemer

    Dr Moritz Kraemer is an international economist and expert in credit analysis and economic policy. Moritz is Chief Economic Advisor of Acreditus, a UAE-based risk consultancy firm, and Independent Non-Executive Director of Scope Ratings, the largest Europe-headquartered Credit Rating Agency. He started his career as an Economist at the Inter-American Development Bank in Washington, D.C. before joining S&P Global Ratings in London in 2001, co-heading the firm’s Frankfurt branch (2013-2018) and recently the Sovereign Ratings Group’ Global Chief Ratings Officer. Moritz has been a prolific public speaker and thought leader in the field of ratings but was also heavily engaged in several far-reaching change management projects, interacting with senior officials in over 100 countries across the globe. Moritz holds a Ph.D. in Economics from the University of Göttingen (Germany). He studied Economics, Latin American Studies and Literature in Frankfurt, Southampton and San Diego. He currently teaches graduate courses at Goethe-University Frankfurt’s House of Finance and the Centre International de Formation Européene (Nice).

  • About the author

    Tri Hoang

    Tri is a Ph.D. student at the University of Economics Ho Chi Minh City, Vietnam. He is also a lecturer at Vietnam's Ho Chi Minh City University of Technology (HUTECH). His research interests include behavioral finance and markets, as well as empirical asset pricing.

  • About the author

    Yen Tran

    Yen is a PhD Candidate at the University of Aberdeen, Scotland. Her research interests are Credit Ratings, Corporate Finance and Narrative Economics. Yen holds an MSc degree in Finance from Coventry University, UK with Distinction in 2017 and a BA in Business Management from Banking Academy of Vietnam in 2015. She won the “Young Science Talent Award” from the Banking Academy of Vietnam in 2015 and published book chapters about entrepreneurship."