The sovereign has Baa3 foreign and local-currency government bond ratings with a stable outlook.
The rating agency notes that the oil price drop has already delivered a significant shock to the oil-reliant Azerbaijani economy and pressured the sovereign's balance sheet. However, Azerbaijan's large stock of foreign assets -- worth roughly $42 billion as of the end of the Q2 2015 – give it time to adjust to lower oil prices, according to the report.