The buyer refused most often is the state
Country risk gets all the attention. Category 5, category 7, off cover, on cover — a market is open or it is not. But an agency that publishes a ladder does not think that way, and reading the ladder rather than the headline changes which deals look possible.
| Class of buyer | Off cover | Open | Countries |
|---|---|---|---|
| Public | 149 | 207 | 435 |
| Private | 47 | 163 | 210 |
| Sovereign | 47 | 99 | 225 |
| Corporate | 25 | 121 | 225 |
| Bank | 20 | 126 | 225 |
Four classes of buyer, the same 201 countries, one agency, one day. The spread is not small.
The state is the worst credit on the page
A public non-sovereign buyer — a ministry, a municipality, a state utility, a regional water authority — is off cover in 149 of 201 countries. A bank is off cover in 20. A corporate buyer in 25.
Note what that is not. It is not a statement about the countries: they are the same countries. It is not about the sovereign either, which is off cover in 47 — worse than a bank, better than a municipality.
It is a statement about who signs. A municipality cannot be sued the way a company can, does not publish accounts the way a bank does, and cannot be relied on the way a treasury can. The agency prices that, and often refuses it.
And that is exactly who is buying
Development banks lend to governments, and governments buy through their own institutions. Of the 141 invitations for bids open in this database today, 74 name a buying organisation whose name reads as a public body — a ministry, an agency, a committee, a state administration.
That is a keyword reading of an organisation's name, not a legal classification, and it is stated that way on purpose. But the direction is not in doubt: the class of buyer an agency is most likely to decline is the class most likely to be standing on the other side of a tender.
What follows
Two things, and neither is obvious from a country rating.
First, the sovereign guarantee is not a formality. It is the difference between an obligor that is refused in 149 countries and one that is refused in 47. If a public buyer wants equipment and the ministry of finance will guarantee it, that is not paperwork — it is the deal becoming insurable.
Second, a contract paid by a development bank is not an export credit deal at all. The bank pays; there is nothing to insure. The cover question applies to the next deal in that market, sold to a buyer on your own paper — which is why every tender page here says so rather than quoting a premium against a contract somebody else is financing.