Citing expectations of notable slowing in economic growth andconcerns about fiscal and current account deficits widening, S&P has downgraded Qatar from AA to AA- as credit risk premia hit 2017 highs.
Qatar credit risk is at 2017 highs (but remains well below Jan 2016 recent highs…
Full Statement from S&P…
On June 5, 2017, a group of governments including Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Libya, and Yemen moved to cut diplomatic ties, as well as trade and transport links with Qatar. We believe this will exacerbate Qatar’s external vulnerabilities and could put pressure on economic growth and fiscal metrics. We are therefore lowering our long-term rating on Qatar to ‘AA-‘ from ‘AA’ and placing it on CreditWatch with negative implications. The negative CreditWatch encompasses numerous downside risks to the rating as a consequence of recent events, reflecting that we could lower the ratings if domestic political risks were to substantially increase or if government indebtedness increases materially quicker than we currently expect. We could also lower the ratings if our assessment of contingent liabilities from the banking system or the government’s related entities were to increase, or if Qatar’s external financing lines were withdrawn.
This post was published at Zero Hedge on Jun 7, 2017.
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