Moody's cuts Kuwait

Moody's Investors Service said it downgraded to Baa3 from Baa2 the long-term issuer rating of Kuwait Projects Co. KSC and the debt instrument ratings on bonds due in 2016 and 2020 issued by Kuwait Projects Co. (Cayman) under a $1 billion euro medium-term note program.

Moody's affirmed Kuwait Projects' Prime-3 short-term rating. The rating action concludes the review for possible downgrade initiated on April 12.

The outlook is negative.

The downgrade reflects a weaker cash coverage ratio that has deteriorated on the back of lower dividend income and higher interest costs, the agency said. However, access to other sources of cash income although more volatile and less predictable by nature, improve the cash coverage ratio when included.

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