For Internal Use Only—Not For External Distribution This document is the property of Standard & Poor’s. It contains proprietary and confidential information and is for internal use only by Standard & Poor’s employees. This document shall not be shown or provided to anyone other than Standard & Poor’s employees. Sovereign Ratings and Remittances Joydeep Mukherji Managing Director Sovereign Ratings New York City, May 27, 2015

What Are Credit Ratings? Issuer Credit Ratings Issue-Specific Credit Ratings Standard & Poor’s opinion of the obligor’s overall capacity and willingness to meet its financial obligations* as they come due. Standard & Poor’s current opinion of the credit risk pertaining to a specific financial obligation, a specific class of financial obligations, or a specific financial program. What credit ratings address: -Creditworthiness of the issuer or issues -The likelihood of timely and full payment of principal and interest -Probability of default** *For sovereign ratings, commercial debt obligations do not include multilateral or bilateral loans so any restructuring of those loans would have no impact on our ratings.

What a credit rating is and what it is not What it is… Forward-looking opinions about relative credit risk, i.e., the creditworthiness of an entity or its securities that … … strive to be globally comparable across sectors Incorporate views on relative likelihood of default* that … Refer to the timely payment of interest and principal and … … are applied to entities and securities What it is not… Investment advice, a recommendation to purchase, sell or hold securities, or a comment as to market price or suitability for an investor A measure of liquidity or market value A way of defining “good” or “bad” companies, or a direct assessment of corporate governance An audit of the company or its auditors A guarantee of credit quality or of future credit risk 3 *S&P Ratings speak to probability of default. Other agencies’ ratings may imply recovery rates and/or other aspects of creditworthiness

Ratings Provide Useful Information to Issuers and Investors Investors seek: Independent opinion to help assess credit risk and to compare different issuers and debt issues Establish thresholds for credit risk and investment guidelines Diversification of investments Enhanced liquidity in secondary markets Borrowers/Issuers seek: Independent view of their creditworthiness and credit quality of their debt issues Expand the universe of investors Diversification of funding sources Independence Objectivity Insightful Analysis Independence Objectivity Insightful Analysis Features of Credit Ratings

Rating Scale: Long-Term Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. Note: this scale refers to Long-Term Ratings only. ‘SD / D’ In payment default on one or more of its financial obligations

Rating Process Analytical Team Appointed Appeal Process Rating Issued Meeting with Government Rating Committee Government Informed Preliminary Research Rating Request Surveillance

7. Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Sovereign Ratings: Growth And Credit Distribution Trends Source: Standard & Poor’s Ratings Services “Sovereign Defaults And Rating Transition Data, 2012 Update” as of March 29, 2013 as published on published on the Global Credit Portal ®.

Supplemental adjustment factors and one notch of flexibility, if applicable 8 Framework for Sovereign Foreign Currency Ratings Foreign Currency Sovereign Ratings Monetary Score Institutional and governance effectiveness Score Economic Score Fiscal Score External Score Flexibility and performance Profile Institutional and governance effectiveness and economic Profile Sovereign Indicative Rating Level

Scoring Of The Five Main Sovereign Rating Factors Key Rating Factors Score: Assigned on a 1 – 6 scale, with 1 the strongest and 6 the weakest Institutional and governance effectiveness Institutional and governance effectiveness score Economic structure and growth prospects Economic score External liquidity and international investment position External score Fiscal flexibility and fiscal performance, combined with debt burden Fiscal score Monetary flexibilityMonetary score 9

Determining a Sovereign Indicative Rating Level 10

Outgoing Remittances FC RatingRemittances sent abroad 2014 (mill USD)(% of total) United StatesAA+130, Saudi ArabiaAA-44, United Arab Emirates (Abu Dhabi)AA29, United KingdomAAA25, GermanyAAA23, CanadaAAA23, FranceAA21, Russian FederationBB+21, Hong Kong SAR, ChinaAAA17, ItalyBBB-16, SpainBBB16, AustraliaAAA15, WORLD TOTAL 583,430 Top 12 as % of world total 65.9% Source: World Bank

Incoming Remittances Remittances as a % of GDP* Top 20 rated countries LebanonB-18 HondurasB17 El SalvadorB+16 JamaicaB-15 GeorgiaBB-12 SenegalB+11 Bosnia and HerzegovinaB11 JordanBB-11 Sri LankaB+10 GuatemalaBB10 PhilippinesBBB10 MontenegroB+10 BangladeshBB-9 SerbiaBB-9 Cabo VerdeB9 AlbaniaB 8 EgyptB-7 Dominican RepublicB+7 MoroccoBBB-7 PakistanB-6 * 2013 data

Incoming Remittances (cont.) Remittances as a % of CAR* Top 20 rated countries El SalvadorB+37 BangladeshBB-31 JamaicaB-30 Sri LankaB+30 PakistanB-29 GuatemalaBB28 PhilippinesBBB27 EgyptB-26 HondurasB26 LebanonB-25 SenegalB+23 Dominican RepublicB+22 Bosnia and HerzegovinaB21 GeorgiaBB-20 AlbaniaB19 NigeriaB+18 MontenegroB+18 SerbiaBB-17 JordanBB-16 MoroccoBBB-15 * 2013 data

For Internal Use Only—Not For External Distribution This document is the property of Standard & Poor’s. It contains proprietary and confidential information and is for internal use only by Standard & Poor’s employees. This document shall not be shown or provided to anyone other than Standard & Poor’s employees. Thank You Joydeep Mukherji 14