Moody's Investors Services has upgraded Bahrain's country ceilings for foreign-currency bonds and onshore bank deposits to Baa1/Prime-2 from Baa3/Prime-3 in light of the diminished geopolitical risk from nearby Iraq and the ongoing success of political reform.
Consequently, Moody's has upgraded the foreign-currency issuer rating for the Kingdom of Bahrain to Baa1 from Baa3. The ceiling for offshore foreign-currency bank deposits has also been upgraded to Aa3/Prime-1 from A3/Prime-2. The Kingdom of Bahrain's local currency bond ratings were affirmed at Baa1. All the ratings retain a stable outlook.
Moody's says the political and economic uncertainty that came with the Iraqi war had constituted a limiting factor for the ratings of Bahrain. That uncertainty has now largely abated.
The political reforms that have taken place in recent times are likely to lead to greater stability in relations among the various groups and communities within Bahrain, says Moody's. The pace of political reform is likely to be maintained in the near future and is expected to be accompanied by further liberalization and diversification of the economy, says the rating agency.
Moody's adds that economic growth has been relatively healthy in recent times and is likely to be sustained in the coming years as a result of several private- and public-sector-led projects in the oil and non-oil sectors. However, while such initiatives will contribute to the growth of the non-oil sector, the government will continue to be highly dependent on oil for its revenues. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
