If Armenia's government bond rating were to change, Moody's would likely reassess the country's ceilings

Moody's Investors Service has changed Armenia's
foreign-currency bond ceiling to Ba1 from Baa3. The website of Moody's says
that the lower ceiling means that the highest rating that can be assigned to a
domestic issuer in foreign currency in Armenia is now Ba1.  Concurrently, Moody's changed Armenia's
short-term foreign-currency bond ceiling to Not-Prime (NP) from Prime-3 (P-3). This
action follows the local-currency ceilings adjustments to Baa3 from Baa1
announced on August 20, 2013.

Armenia's ceilings thus are as follows: the local-currency
bond and bank deposit ceilings are Baa3, the foreign-currency bond ceiling Ba1,
and the foreign-currency bank deposit ceiling Ba3. The short-term
foreign-currency ceilings are Non-Prime (NP).

Moody's decision to lower Armenia's foreign-currency bond
ceiling is based on the rating agency's assessment of Armenia's low
institutional strength in addition to limited financial and trade openness. In
light of the significant dollarization of the economy, Moody's deems a one
notch gap between the foreign- currency bond ceiling and Armenia's government
bond rating appropriate.

If Armenia's government bond rating were to change,
Moody's would likely reassess the country's ceilings at that time.

Moody's foreign currency bond ceiling is an assessment
of the probability that a defaulting government would adopt a moratorium on the
foreign currency debt repayments of domestic issuers. Moratorium restrictions
refer to two separate risks: restrictions on moving foreign exchange offshore
(transfer risk) and restrictions on freely converting local currency to foreign
currency (convertibility risk).  In
practice, transfer and convertibility restrictions often occur together. Moody's
assesses moratorium risk within the historical context of the ongoing process
of financial market deepening and globalization, and with respect to the
individual country's institutional environment, financial and economic
integration and openness, capital account openness, as well as domestic
economic management which could alter a government's assessment of the
desirability of debt moratorium as a policy option.