Middle-east Arab News Opinion | Asharq Al-awsat

S&P lowers Bahrain ratings on fear of more protests - ASHARQ AL-AWSAT English Archive
Select Page

DUBAI, (Reuters) – Standard and Poor’s lowered its long- and short-term sovereign credit ratings for Bahrain over concerns that the political unrest and demonstrations of the past week will persist.

The rating agency set Bahrain’s ratings to A-/A-2 from A/A-1 and placed them on CreditWatch with negative implications.

Bahrain demonstrators thronged back on Monday into a central square that was the scene of deadly violence last week after a night-time raid by riot police killed four people. Seven people have died and about 230 injured since the protests began a week ago.

Protesters, led by majority Shi’ites demanding more say in the Sunni-ruled kingdom, camped out in Manama’s Pearl Square to press demands for a new government on Monday, backed by a teachers’ strike that closed many schools.

S&P also lowered the ratings on the Central Bank of Bahrain and Bahrain Mumtalakat Holding, the sovereign wealth fund, to A-/A-2 from A/A-1 and also placed them on CreditWatch negative. The Transfer and Convertibility Assessment on Bahrain was also changed to A from AA-.

“The rating actions reflect our reappraisal of political risks in Bahrain,” S&P said in a statement.

“We expect the demonstrations … will persist, despite the government’s use of force to clear the protesters from central Manama.”

S&P said it aims to resolve the CreditWatch listing within the next three months, when the course of political events is clearer.

Debt insurance costs for Middle Eastern sovereigns continued to rise, with Bahrain’s five-year credit default swaps 8 basis points higher at a new 18-month high of 305 bps.

Dubai rose 9 bps to 440 bps while Israel also inched higher to a new 19-month high.

King Hamad bin Isa al-Khalifa has asked his son, the crown prince, to conduct a dialogue with all parties, but after the bloodshed on the streets, opposition parties are wary.

“We expect discussions on political reforms to be more protracted than those focused on improving the social safety net,” the ratings agency said.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

More Posts

Follow Me:
FacebookGoogle PlusYouTube