Debt Service vs. Debt Stock in Sovereign Credit Ratings: A Systematic Review and Meta-Regression Analysis

Abstract

Sovereign credit ratings are central to a country’s access to international capital markets, yet the relative informational content of debt service obligations versus aggregate debt stock for rating outcomes remains empirically unsettled. This systematic review synthesises econometric evidence on both measures across 23 primary studies published between 1996 and 2024. The central message of this paper is that debt service indicators—capturing near-term liquidity and refinancing pressure—are at least as informative as, and on average more informative than, debt stock ratios for sovereign credit assessments, particularly in emerging-market contexts and ordered-response specifications. This finding holds across heterogeneous study designs and is confirmed by meta-regression analysis, which shows that debt service effects are significantly more negative than debt stock effects (β = −0.09, p = 0.004) after controlling for sample composition, model family, and rating agency. Emerging-market samples and ordered-response estimators yield stronger associations than advanced-economy samples and linear (OLS) specifications. No consistent differences across the major rating agencies are found once study-design moderators are included. Because primary studies differ in model families, samples, and variable construction, we emphasise transparent reporting, avoid over-interpreting pooled magnitudes, and focus on robust qualitative patterns and moderator-based explanations of heterogeneity. The findings contribute to the literature on sovereign rating determinants and have practical implications for fiscal monitoring, suggesting that debt management aimed at improving near-term servicing capacity matters for credit assessments in ways that are not fully captured by stock-based fiscal anchors.