Dhaka, Bangladesh (BBN) – Bangladesh on Thursday signed deals with two top global rating agencies, Moody’s and Standard & Poor’s, to analyse the country’s financial health and come up with rating of its credit-worthiness, officials said.

The landmark deal will for the first time pave the way for Bangladesh being rated by the two agencies — markings of which would be used as yardstick by foreign investors and funds on the country’s overall economic health.

 A country needs to have credit rating if its government and companies want to float bonds in foreign currency, because investors— particularly those from the global financial hubs— evaluate such scores before making investments.

The country would get its first credit rating report by October this year, which will help woo increasing amount of foreign funds to its shore, the Bangladesh Bank (BB) officials said.

General Manager of the Foreign Exchange Policy Department of the central bank Khandaker Khalidur Rahman signed the agreements on behalf of the ministry of finance.

“The companies will start preparing the credit rating report on Bangladesh from July this year,” Mr. Rahman told BBN in Dhaka after signing the deals.

New York-based Moody’s is the world’s largest credit rating agency, accounting for some 40 per cent of the market. It performs financial research and analysis on commercial and government entities.

Standard’s and Poor’s, the world’s oldest credit rating agency, is also based in the United States, and it issues ratings for the debt of public and private corporations.

Rahman said credit rating by the two agencies would play a crucial role in attracting foreign investment and mobilizing funds at a cheaper interest rate to Bangladesh.

“Both public and private sectors can mobilize loans from overseas sources at lower interest rates if the country has a good credit rating report,” another BB official said.

Senior Vice President and Representative Director of Moody’s Singapore office Christina Maynes and Vice-President and Region Head Client Business Management – Asia Pacific Denis O’sullivan signed the deals on behalf of their companies earlier and sent the agreements to the central bank.

Earlier the two top global credit rating companies have been selected by a high profile committee of the government, led by Bangladesh Bank Executive director Khandakar Muzharul Haque.

Officials said the central bank would allow three foreign commercial banks — Standard Chartered, Citibank N.A, and the HSBC — to provide advisory services to the two agencies during preparation of credit rating reports.

BBN/SS/SSR/AD-26June09-1:45 am (BST)