Moody's may upgrade six Gulf countries

Moody's Investors Service said it placed the long-term foreign- and local-currency government bond ratings and country ceilings for long-term foreign-currency bank deposits of six Gulf countries on review for upgrade: Bahrain (Baa1), Kuwait (A2), Oman (Baa1), Qatar (A1), Saudi Arabia (A3) and the United Arab Emirates (A1).

The country ceilings for long-term foreign-currency bonds of Bahrain (A2), Kuwait (Aa3), Oman (A2) and Saudi Arabia (A1) were also placed on review for possible upgrade.

The agency said the review reflects the significant strengthening of the public and external finances of the oil-exporting member states of the Gulf Cooperation Council.

"This improvement has largely been caused by the sustained rise in global hydrocarbon prices over the past five years. In addition, we have been encouraged by the relatively judicious use of oil export receipts compared with previous oil booms," Tristan Cooper, a vice president at Moody's London office, said in an agency rating.

"At the same time, the regional political environment remains difficult," Cooper said. Key concerns are the mounting tensions between Iran and the United States and United Nations over the nuclear issue, the chaotic political situation in Iraq, the continued low-level threat posed by Islamist militancy across the region and the apparent rise of sectarianism.

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