Reconstruction Rating Model of Sovereign Debt by Logical Analysis of Data

Sovereign debt ratings provided by rating agencies measure the solvency of a country, as gauged lender or an investor. It is indication risk involved in investment and should be determined correctly well-timed manner. The current system lacking transparency criteria mechanism. present study reconstructs sovereign through logical analysis data (LAD), which based on theory Boolean functions. organizes groups countries according to 20 World Bank-defined variables for period 2012–2015. Fitch Rating Agency, one three big global agencies, used case study. An approximate algorithm was crucial exploring method, correcting agency’s errors, determining estimated otherwise unrated countries. outcome decision tree each year. Each country assigned rating. On average, reached almost 98% matched training set verified 84% test set.