Fitch Ratings hasn Monday downgraded the long-term issuer default ratings of Bahrain Telecommunications Company (Batelco) and Bahrain Mumtalakat Holding Company (Mumtalakat) to 'BB+' from 'BBB-'.
The ratings agency said in a statement that the outlooks for the state-backed companies are both stable.
The rating actions follow the downgrade last week of Bahrain's long-term foreign currency issuer default rating to 'BB+' from 'BBB-' and long-term local currency IDR to 'BB+' from 'BBB', becoming the latest agency to move its ratings on the Gulf nation into junk territory as oil prices remain weak.
Fitch said that lower oil prices are causing a "marked deterioration" in Bahrain's fiscal position.
"There is progress in fiscal consolidation, but not a clear path towards reaching a more sustainable position," the ratings agency said.
Both Batelco and Mumtalakat are government-linked entities and their ratings are constrained by and equalised with Bahrain's rating, respectively, Fitch added.
In May, Batelco posted a 33 percent fall in first-quarter profit as its subscriber base and revenue both declined.
Batelco made a net profit of 9.6 million Bahraini dinars ($25.46 million) in the three months to March 31, it said in a statement.
Bahraini sovereign fund Mumtalakat in May posted a 68.7 percent drop in 2015 net profit, as the state-owned investor cited impairment losses for the decline.
Net profit in 2015 was $76.3 million against $243.6 million in the previous year, Mumtalakat said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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