S&P downgrades Nakilat, bonds

S&P said it lowered the long-term rating on Nakilat Inc. to A+ from AA- and placed the rating on CreditWatch with negative implications.

At the same time, the agency downgraded the issue rating on Nakilat's $850 million senior secured bonds to A+ from AA- and the issue rating on its $300 million senior secured subordinated bonds to A from A+.

S&P said it regards Nakilat as a government-related entity (GRE) and the rating reflects the extremely high likelihood that it would receive extraordinary support from the Qatari government if it were to experience any financial stress. Therefore, these actions follow the recent rating action on Qatar. In the agency’s opinion, the fact that six Arab countries cut diplomatic ties and trade and transport links to Qatar will exacerbate the country's external vulnerabilities and could weigh on its economic growth and fiscal metrics.

S&P said the ratings reflect Nakilat’s importance to Qatar's strategy for LNG distribution around the world. The company’s vessels cover about 65% of the transportation requirements of Qatar's LNG industry, which represents 90% of government revenues.

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