IHS Global Insight has launched an enhanced short-term sovereign risk service to provide analysis on the short-term creditworthiness of all 204 governments worldwide.

The short-term ratings will focus on threats to liquidity as well as creditor and political relationships. It will also give notice of a country’s financial problems, well before the medium-term ratings could signify such difficulties, says Jan Randolph, director of sovereign risk at IHS.

“The extension of IHS sovereign ratings into the short term from the industry benchmark medium term, serves an important but neglected space in the rating industry that is either unoccupied or poorly covered. With this new service, IHS is the only ratings provider that now covers sovereign risk down the full timeline and for all countries in the world,” Randolph adds.

The mix of criteria and factors that make up the new short-term model’s structure are a country’s liquidity, creditor and political relations – factors that are considered more pertinent for short-term knowledge and trade finance markets.

The short-term model is comprised of two components; 60% will be made up of a quantitative driver assessing six key liquidity ratios, while the remaining 40% will assess two key creditor relationship issues, transfer payments delays, the interest arrears position, and key external creditor and political relations.