Oman Downgrades Threaten Bond Issue

Oman has been downgraded by a second ratings agency within 10 days in a move that potentially complicates the country's planned bond issue.

Having had its sovereign rating cut two notches by S&P on 17 February, Moody’s in turn cut the country’s long term issuer rating to A3 on 26 February.

However, while the S&P downgrade from BBB+ to BBB- left Oman just one notch above junk status (MEES, 19 February), the Moody’s cut from A1 to A3 leaves Oman still a relatively-comfortable four notches above non-investment status.

{{{NEGATIVE IMPACT OF OIL PRICES}}}}

Both agencies have Oman on review for a further downgrade, however, and both not surprisingly give the key driver for the downgrade as, in Moody’s words, “the highly negative impact of the structural shift in lower oil prices.”


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