Moody’s downgrades Israel

Moody's Investors Service said it downgraded Israel's foreign-currency and local-currency issuer ratings to A2 from A1.

Moody's also downgraded Israel's foreign-currency and local-currency senior unsecured ratings to A2 from A1 and the foreign-currency senior unsecured shelf and senior unsecured medium-term note program ratings to provisional A2 from provisional A1.

The outlook is negative.

Previously, the ratings were on review for downgrade. This concludes the review for downgrade initiated by Moody's on Oct. 19.

Israel's backed senior unsecured rating was affirmed at Aaa. The related issuances benefit from an irrevocable, on-demand guarantee provided by the United States (Aaa, negative).

“The main driver for the downgrade of Israel's rating to A2 is Moody's assessment that the ongoing military conflict with Hamas, its aftermath and wider consequences materially raise political risk for Israel as well as weaken its executive and legislative institutions and its fiscal strength, for the foreseeable future,” the agency said in a news release.

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