Mubasher: Moody's Investors Service on Friday downgraded Bahrain's long-term issuer rating to Ba1 from Baa3 with a negative outlook and placed it on review for further downgrade.
According to the rating agency, the key driver for the rating downgrade is the highly negative impact of the further sharp fall in oil prices, which it expects to remain low for several years, on Bahrain's government finances, balance of payments and economic performance.
Moody's also lowered Bahrain's foreign currency bond ceiling to Baa2 from Baa1 and foreign currency deposit ceiling to Ba2 from Baa3. The short-term foreign currency bond ceiling was lowered to Prime-3 (P-3) from Prime-2 (P-2), whereas the short-term foreign-currency deposit ceiling was lowered to Not Prime (NP) from P-3. Bahrain's local currency country risk ceilings were lowered to Baa1 from A3.
