S&P lowers two Tunisia banks to negative view

S&P said it revised the outlooks on Arab Tunisian Bank and Banque de l'Habitat to negative from stable and affirmed the B long- and short-term issuer credit ratings on both banks.

S&P also said it affirmed the B long-term issuer credit rating on Banque Tuniso-Koweitienne with a negative outlook.

The agency also said it affirmed the B- long-term and B short-term issuer credit ratings on Banque de Tunisie et des Emirats with a stable outlook.

The ratings changes follow the revision of the economic risk assessment for Tunisia to negative from stable.

The actions are primarily driven by Tunisia's lackluster economic performance, slower than expected reform implementation ahead of the upcoming elections and its higher regional geopolitical risks, S&P said.

The agency said it particularly considers the risk of additional fiscal slippage as significant in the run up to elections, which could exacerbate the country's already high indebtedness.

Tunisia's debt service is set to reach a record $3.3 billion in 2019, S&P said, and keep increasing in the next couple of years.

Tunisia's economic risk assessment also continues to reflect its diversified economy, the agency added.

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