Moody’s downgrades Oman

Moody's Investors Service said it downgraded the Government of Oman's long-term issuer and senior unsecured bond ratings to Baa2 from Baa1 and changed the outlook to negative from stable.

The key driver for the downgrade is that in the agency’s view, progress toward addressing structural vulnerabilities to a weak oil price environment has been more limited than expected, reflecting institutional capacity constraints to address the large fiscal and external imbalances.

The negative outlook reflects Moody's view that despite a number of credit strengths the balance of risks to the Baa2 rating are skewed to the downside.

The agency also lowered Oman's long-term foreign-currency bond ceiling to Baa1 from A3 and long-term foreign-currency bank deposit ceiling to Baa2 from Baa1. At the same time, the short-term foreign-currency bond and deposit ceilings are unchanged at Prime-2. Oman's long-term local-currency country risk ceilings were lowered to Baa1 from A3.

The action also applies to Oman Sovereign Sukuk SAOC, for which the backed and senior unsecured ratings were downgraded to Baa2 from Baa1 and the senior unsecured medium-term note program was downgraded to provisional Baa2 from provisional Baa1.

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