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.” (CONTINUED - 697 WORDS)