Kuwait - Mubasher: Moody's Investors' Service has affirmed Kuwait’s long-term issuer rating at Aa2, and upgraded the rating outlook to stable from negative, according to a recent report.
The decision to change the outlook from negative to stable was attributed to the view that there are sufficient signs of Kuwait's government's institutional capacity to effectively implement its fiscal and economic reform program to preserve creditworthiness in the medium-term.
Meanwhile, the research firm said that the affirmation reflects its view that, despite Kuwait's slower fiscal and economic reform progress relative to other highly-rated peers in the Gulf in response to lower oil prices, the sovereign's extraordinarily strong balance sheet, very high wealth levels and vast hydrocarbon reserves continue to support a credit profile that remains consistent with an Aa2 rating.
Kuwait's long-term and short-term foreign-currency bond and deposit ceilings remain unchanged at Aa2 and Prime-1, respectively, and Kuwait's long-term local-currency country risk ceiling also remains unchanged at Aa2, the report noted.
The decision also reflects Moody's view that Kuwait's institutional strength has improved to a degree that will help limit downside risks to the rating. In addition, fiscal performance in the past fiscal year proved slightly stronger than expected at the time of the last rating action.
