waltermasoni
Caribbean Trader
Rating Action:
Moody's assigns B2 rating to drawdown from Bahrain's Global Medium Term Note Program
26 Sep 2019
Singapore, September 26, 2019 -- Moody's Investors Service ("Moody's") has today assigned a B2 senior unsecured rating to the $1 billion 12-year bond issued under the new Global Medium Term Note Program established by the Government of Bahrain (B2 stable). The rating was initiated by Moody's Investors Service and was not requested by the rated entity.
The notes represent senior unsecured obligations of the government, ranking pari passu with all other outstanding obligations.
RATINGS RATIONALE
The B2 rating assigned to the drawdown is at the same level as the long-term issuer rating of the Government of Bahrain, which is supported by the sovereign's very high per capita income levels, a fairly diversified economy relative to its GCC peers, and still robust growth dynamics, which is reflected in Moody's assessment of "High (-)" economic strength. The rating also reflects the country's "Moderate (-)" institutional strength, which balances relatively strong governance indicators with a poor track record of implementation of fiscal reforms.
"Very Low (-)" assessment of fiscal strength on the back of high and increasing government debt burden and low debt affordability constrains the sovereign's creditworthiness. Moreover, Moody's assesses Bahrain's susceptibility to event risk as "High", driven by both government liquidity risk and external vulnerability risk. The government liquidity risk is driven by very high borrowing requirements. External vulnerability risks stem from very thin buffers, which Moody's deems insufficient to cover external financing needs, though access to the financial support package from other GCC members mitigates some of these risks.
Moody's assigns B2 rating to drawdown from Bahrain's Global Medium Term Note Program
26 Sep 2019
Singapore, September 26, 2019 -- Moody's Investors Service ("Moody's") has today assigned a B2 senior unsecured rating to the $1 billion 12-year bond issued under the new Global Medium Term Note Program established by the Government of Bahrain (B2 stable). The rating was initiated by Moody's Investors Service and was not requested by the rated entity.
The notes represent senior unsecured obligations of the government, ranking pari passu with all other outstanding obligations.
RATINGS RATIONALE
The B2 rating assigned to the drawdown is at the same level as the long-term issuer rating of the Government of Bahrain, which is supported by the sovereign's very high per capita income levels, a fairly diversified economy relative to its GCC peers, and still robust growth dynamics, which is reflected in Moody's assessment of "High (-)" economic strength. The rating also reflects the country's "Moderate (-)" institutional strength, which balances relatively strong governance indicators with a poor track record of implementation of fiscal reforms.
"Very Low (-)" assessment of fiscal strength on the back of high and increasing government debt burden and low debt affordability constrains the sovereign's creditworthiness. Moreover, Moody's assesses Bahrain's susceptibility to event risk as "High", driven by both government liquidity risk and external vulnerability risk. The government liquidity risk is driven by very high borrowing requirements. External vulnerability risks stem from very thin buffers, which Moody's deems insufficient to cover external financing needs, though access to the financial support package from other GCC members mitigates some of these risks.
