Government of Costa Rica: FAQ on the sovereign credit implications of recent cyberattacks

Government of Costa Rica: US financial assistance will help Costa Rica mitigate cyber-related credit risks - Issuer Comment – 2023/04/05 – US$ 200.00 – ...On 29 March, the US (Aaa stable) government announced its intention to provide $25 million to Costa Rica (B2 stable) to help strengthen the country's cyber security. The financial assistance follows cyberattacks against the government of Costa Rica in January 2023 targeting the Ministry of Public Works and Transport and a series of attacks in April-May 2022 that negatively affected tax revenue intake, among other government functions. The US aid will help Costa Rica strengthen its cybersecurity framework and response to future attacks, which pose fiscal and economic risks. The US government's $25 million in financial support to shore up Costa Rica's cyber defenses will specifically support new training, equipment, and a collaboration between the US and the Costa Rican government to establish a Security Operations Center to oversee and address future cyber threats. Following the cyberattacks in 2022, Costa Rica also received technical assistance from the US, Spain (Baa1 stable) and Israel...

Government of Costa Rica - B2 stable: Annual credit analysis - Issuer In-Depth – 2023/02/28 – US$ 750.00 – ...The credit profile of Costa Rica reflects the balance of a relatively wealthy and dynamic economy with a large increase in the country's debt burden and substantial deterioration in debt affordability since 2010. Low debt affordability will remain the most significant credit challenge, with interest payments at 28.6% of revenue in 2022, substantially above the median for sovereigns with a B rating. Costa Rica's high debt burden and limited debt affordability will continue to constrain the sovereign's credit profile. Although the authorities are gradually building a track record of fiscal credibility through efforts to narrow the sovereign's historically large deficits in the context of a 36-month program under the International Monetary Fund's (IMF) Extended Fund Facility (EFF) and a number of fiscal reforms adopted since 2018, reclaiming the fiscal space lost over many years of high fiscal deficits will require continued fiscal discipline under multiple government administrations. Costa...

Government of Costa Rica: Low liquidity buffers and debt affordability constrain sovereign credit profile despite payment of 2023 global bond - Issuer Comment – 2023/02/06 – US$ 200.00 – ...*Dashed bar in 2023 represents most recent payment Sources: Ministerio de Hacienda de Costa Rica and Moody's Investors Service...

Government of Costa Rica B2 stable: Update following methodology update - Credit Opinion – 2022/12/13 – US$ 250.00 – ...Costa Rica's rating reflects the balance of a relatively wealthy and dynamic economy with the large increase in the country's debt burden and substantial deterioration in debt affordability since 2010. Low debt affordability is the biggest credit challenge, with interest payments of more than 30% of revenue in 2021. Additionally, the sovereign has continually struggled to maintain an adequate fiscal liquidity buffer, more recently brining into question its ability to meet its January 2023 eurobond maturity....

Government of Costa Rica: Sovereign expected to meet January 2023 global bond maturity, but funding yet to be completed - Issuer Comment – 2022/11/14 – US$ 200.00 – ...Costa Rica (B2 stable) faces a $1 billion principal payment on a global bond that comes due on 26 January 2023 ¡ the next international bond amortization of $500 million is not due until 2025. Our base case scenario is that the sovereign will meet next year's payment in full and on time, relying on a combination of current savings and multilateral and bilateral lending. However, multilateral and bilateral loans require approval from the Legislative Assembly, which is still pending and would have to be obtained before the end of the year. If the approval process is delayed, the government would be forced to tap domestic funding sources to meet in full the upcoming payment....

Government of Costa Rica B2 stable: Regular update - Credit Opinion – 2022/06/09 – US$ 250.00 – ...Costa Rica's rating reflects the balance of a relatively wealthy and dynamic economy and strong institutions with the large increase in the country's main debt metrics since 2010. Under the current IMF program, the fiscal deficit decreased to 5% of GDP in 2021 while the debt burden has stabilized below 70% of GDP. Low debt affordability is the biggest credit challenge, with interest payments of more than 30% of revenue in 2021....

Government of Costa Rica: Cyberattack disabling key government services is credit negative - Issuer Comment – 2022/05/18 – US$ 200.00 – ...On 16 May, Costa Rica's (B2 stable) President Rodrigo Chaves said that the April cyberattack that targeted the Ministry of Finance and other ministries, was broader than previously thought, and included municipalities and state-run utilities. The new president, in office for just one week, announced a task force address the situation and to restore the government's online services. For now, the government cannot perform functions such as collecting taxes and distributing social security. The cyberattack reveals institutional and cybersecurity weaknesses and is credit negative for the sovereign, which will likely need to increase spending this year to resolve the situation and to increase cybersecurity. Since the original attacks on 18 April, the Ministry of Finance ¡ unable to digitally collect tax payments and customs receipts ¡ has asked individuals and companies to submit information in person or through email. The government has also been unable to verify budget results without the...

Government of Costa Rica B2 stable: Annual credit analysis - Issuer In-Depth – 2022/02/03 – US$ 750.00 – ...The credit profile of Costa Rica reflects the balance of a relatively wealthy and dynamic economy and relatively strong institutions with the large increase in the country's debt metrics since 2010. Under the current IMF program the fiscal deficit decreased to 5% of GDP in 2021 from 8% in 2020. Low debt affordability will remain the biggest credit challenge, with interest payments at 30% of revenue in 2021, almost triple the median for sovereigns with a B rating. Costa Rica's elevated debt burden and limited debt affordability will require several years of fiscal adjustment for the debt trajectory to reach a sustainable path. In July 2021, the Costa Rican Congress approved an agreement with the International Monetary Fund (IMF) for a 36- month program under the Extended Fund Facility (EFF) to support Costa Rica's recovery and stabilize its economy. The agreement will provide $1.8 billion in concessional financing to the government to support the implementation of corrective fiscal measures....

Government of Costa Rica B2 stable: Update following outlook change to stable from negative - Credit Opinion – 2021/12/09 – US$ 250.00 – ...Costa Rica's rating reflects the balance of a relatively wealthy and dynamic economy and relatively strong institutions with the large increase in the country's main debt metrics since 2010. Under the current IMF program the fiscal deficit will decrease to 6% of GDP in 2021 from 8% in 2020. Low debt affordability will remain the biggest credit challenge, with interest payments at nearly 33% of revenue in 2021, almost triple the median for sovereigns with a B rating....

Moody's changes Costa Rica's outlook to stable, affirms B2 ratings - Rating Action – 2021/12/08 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...