Bahrain’s credit rating was lowered one level at Moody’s
Investors Service with a negative outlook, citing the impact of the recent
political turmoil on economic growth and the weakening of the banking industry.
Bahrain’s government bond rating was reduced to Baa1, the
third lowest investment grade, from A3, the ratings service said in an e-mailed
statement.
“The main driver underlying Moody’s decision to downgrade is
the significant deterioration in Bahrain’s political environment since
February,” Moody’s said in the statement.
The island-kingdom saw anti-government protests in February
and March, inspired by revolts that toppled the leaders of Egypt and Tunisia
this year. The protests prompted members of the Gulf Cooperation Council to
send a military force to help restore order.
Bahrain’s economic growth may slow to 3.1 percent this year
from 4.1 percent in 2010, the International Monetary Fund said in its Economic
Outlook in April.
Bahrain’s BB All Share Index slipped 0.3 percent at the
12:30 p.m. close in Manama before Moody’s announcement. The yield on Bahrain’s
5.5 percent bond maturing in March 2020 rose 2 basis points, or 0.02 percentage
point, to 5.67 percent at 3:12 pm in Bahrain, according to Bloomberg composite
prices.
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