Moody’s downgrades Bahrain to Ba2

Moody's Investors Service said it downgraded Bahrain's long-term issuer ratings to Ba2 from Ba1 and assigned a negative outlook.

The action concludes the review for downgrade initiated on March 4.

Moody’s said the main driver for the downgrade is its view that the credit profile of the Bahraini government will continue to weaken materially in the coming years, despite its fiscal consolidation efforts. In particular, the agency expects Bahrain's government debt burden and debt affordability to deteriorate significantly over the coming two to three years.

The negative outlook reflects increased downside risks to the rating, which manifest themselves in heightened government liquidity and external liquidity risks. Furthermore, although Bahrain has benefited from the support of neighboring countries during times of stress in the past, such support at this juncture lacks clarity, both in its form and timeliness, Moody’s said.

Moody’s lowers three Bahraini banks

Moody's Investors Service said it concluded its review for downgrade on the ratings of four Bahraini banks initiated on March 7 and downgraded the long-term local currency ratings of BBK BSC, National Bank of Bahrain BSC and Bahrain Development Bank BSC to Ba2 from Ba1.

All ratings carry a negative outlook.

The actions on the Bahraini banks reflect the weakening financial strength of the sovereign, as indicated by Moody's downgrade of Bahrain's government issuer rating to Ba2 negative from Ba1 ratings under review, on May 14, which concluded the review for downgrade of the sovereign rating that was initiated on March 4. The sovereign action reflects the ongoing negative impact of lower oil prices on Bahrain's fiscal position and economic strength.

Moody's said its decision to downgrade BBK's and National Bank of Bahrain's ratings reflects the close linkage of the banks' credit profile to the weakening fiscal position of the government, primarily through their high and increasing direct holdings of Bahraini government securities.

The decision to downgrade Bahrain Development Bank's ratings primarily reflects the reduced fiscal capacity of the government to provide support to the bank in times of stress, if needed.

Moody’s cuts China Minmetals, debt to Baa1

Moody's Investors Service said it downgraded the issuer rating of China Minmetals Corp. to Baa1 from A3.

At the same time, the agency downgraded the dollar-denominated senior unsecured debt ratings of the bonds issued by Minmetals Bounteous Finance (BVI) Ltd. and guaranteed by China Minmetals to Baa1 from A3.

The outlook is negative.

This action concludes the review initiated on Jan. 22.

Moody’s said the downgrade reflects: (a) The weak state of earnings in the company's metal and mining portfolio due to the material decline in global base metal prices; and (b) deteriorated credit metrics and expectation of high albeit improved leverage, as measured by adjusted debt/EBITDA, of around 7 times by the end of 2017.

China Minmetals' Baa1 ratings combines its downgraded baseline credit assessment (BCA) of ba3 from ba2 and a five-notch uplift based on an expected very high level of support from the Chinese government (Aa3 negative) under Moody's joint default analysis approach for government-related issuers.

Moody’s cuts Gulf International Bank debt

Moody's Investors Service said it downgraded Gulf International Bank BSC's senior unsecured debt ratings to Baa1 from A3 and subordinated debt rating to provisional Baa2 from provisional Baa1.

All other ratings were confirmed.

The outlook was changed to negative. This action concludes the review initiated on March 7.

Moody’s said the downgrade reflects the weakened capacity of the government of Saudi Arabia, the bank's main shareholder, to support Gulf International Bank in case of need and follows the downgrade of the government of Saudi Arabia issuer rating to A1 from Aa3.

S&P cuts Kazkommertsbank

S&P said it lowered to CCC+ from B- its long-term counterparty credit rating on Kazkommertsbank JSC.

At the same time, S&P lowered the Kazakhstan national scale rating to kzB- from kzBB- and affirmed the C short-term rating on KKB. The outlook is negative.

At the same time, S&P lowered the rating on the subordinated debt of the bank to CCC- from CCC and on the junior subordinated debt to CC from CCC-.

S&P said the downgrade reflects its view that KKB is experiencing increasing pressure from a combination of external and internal factors.

“The bank’s liquidity and capitalization ratios suggest that its short-term (under one year) prospects remain assured. However, we think that KKB is increasingly vulnerable in the long term, as shown by a loss the bank made in 2015 (despite the transfer of nonperforming assets to BTA),” S&P said in a news release. “Additionally, the operating environment is likely to remain weak, and we have seen no clear progress from management in setting out a credible strategy to ensure the bank's long-term health.”

Moody’s lowers Montenegro, debt to B1

Moody's Investors Service said it downgraded Montenegro's long-term issuer and senior unsecured debt ratings by one notch to B1 from Ba3.

The short-term ratings were affirmed at Not Prime (NP).

The outlook remains negative.

Moody’s said the key drivers for the action are:

• Fiscal risks related to the highway project, which will increase the government's debt-to-GDP ratio. Cost overruns of the highway project could push the debt burden even higher, thereby reducing the country's shock absorption capacity further;

• Beyond the deterioration expected from the highway project, the government's pro-cyclical fiscal policy is set to weaken the government's balance sheet further; and

• The erosion in the country's external buffers due to elevated and persistent external imbalances, reflected in an expected current account deficit of close to 20% of GDP.

The negative outlook reflects the agency’s view of downside risks to the B1 rating. These relate to risks associated with the government's debt-funded growth strategy and the heightened policy uncertainty associated with the parliamentary elections to be held by October this year.

Moody’s also lowered the long-term foreign-currency bond and deposit ceilings to Ba1 from Baa1 and to B2 from B1, respectively. The short-term foreign-currency bond ceiling was downgraded to NP from Prime-2 (P-2), while the short-term foreign-currency deposit ceiling was assigned at Not Prime.

Moody’s downgrades Oman to Baa1

Moody's Investors Service said it downgraded Oman's long-term issuer ratings to Baa1 from A3 and assigned a stable outlook.

This action concludes the rating review for downgrade initiated on Feb. 26.

Moody’s said the key driver for the downgrade is its view that, despite the sizable fiscal consolidation efforts undertaken by the government, a protracted period of low oil prices will negatively affect Oman's sovereign credit profile beyond the level Moody's anticipated in February when it downgraded the rating to A3 from A1.

The stable outlook reflects a number of strengths, which the agency believes will counterbalance potential downside risks and keep the credit profile compatible with a Baa1 rating over the coming years. These include low levels of government indebtedness and fiscal buffers.

Moody's also lowered Oman's long-term foreign-currency bond ceiling to A3 from A2 and its long-term foreign-currency deposit ceiling to Baa1 from A3. The short-term foreign-currency bond ceiling was downgraded to Prime-2 from Prime-1, while the short-term foreign-currency deposit ceiling remains at Prime-2. In addition, the long-term local-currency country risk ceilings were lowered to A3 from A2.

Moody’s lowers Omani banks

Moody's Investors Service said it concluded its review for downgrade on the ratings of four Omani banks initiated on March 3 by downgrading the long-term deposit ratings of BankMuscat SAOG to Baa1 from A3, Oman Arab Bank to Baa2 from Baa1 and Bank Dhofar SAOG to Baa2 from Baa1 and confirming the Baa1 long-term deposit rating of HSBC Bank Oman SAOG.

The agency also assigned a negative outlook to Bank Dhofar's long-term ratings while the ratings of the three other banks carry a stable outlook.

In addition, Moody's affirmed the Ba3 corporate family rating and the B1 issuer rating of Al Omaniya Financial Services SAOG. The ratings continue to carry a negative outlook.

These actions follow the agency’s May 14 downgrade of Oman's government issuer rating to Baa1 (stable) from A3, concluding the review for downgrade initiated on Feb. 26. The sovereign action reflects Moody's view that a protracted period of low oil prices will negatively affect Oman's sovereign credit profile beyond the previously anticipated level, despite the sizable fiscal consolidation efforts undertaken by the government.

The rating downgrades of three Omani banks reflect the reduced capacity of the Omani government to provide support to the banks in case of need, as indicated by the downgrade of the government's rating. However, Moody's said its assessment of the government's willingness to support the banks in case of need remains unchanged.

Moody’s lowers Saudi Arabia to A1

Moody's Investors Service said it downgraded Saudi Arabia's long-term issuer ratings to A1 from Aa3 and assigned a stable outlook.

This action concludes the review for downgrade initiated on March 4.

Moody’s said the downgrade reflects its view that lower oil prices have led to a material deterioration in Saudi Arabia's credit profile. A combination of lower growth, higher debt levels and smaller domestic and external buffers leave the kingdom less well positioned to weather future shocks.

As part of the rating action, the agency also lowered Saudi Arabia's long-term foreign-currency bond and deposit ceilings to A1 from Aa3, whereas the short-term ceilings remain at Prime-1. The long-term local-currency country risk ceilings were also lowered to A1 from Aa3.

Moody’s cuts nine Saudi banks’ deposit ratings

Moody's Investors Service said it concluded its review for downgrade on the ratings of 11 Saudi banks initiated on March 7 by downgrading the long-term deposit ratings of nine banks and confirming the ratings of two banks.

The nine banks are Samba Financial Group, Banque Saudi Fransi, Saudi British Bank, Arab National Bank, Riyad Bank, Saudi Hollandi Bank, Saudi Investment Bank, Bank AlBilad and Bank Al-Jazira.

In addition, the agency confirmed the deposit ratings of Al Rajhi Bank and National Commercial Bank.

All ratings carry a stable outlook.

The actions on the banks follow Moody's downgrade of Saudi Arabia's government issuer rating on May 14 to A1 (stable) from Aa3, which concluded the review for downgrade of the sovereign rating that was initiated on March 4.

The sovereign action reflects the ongoing negative impact of lower oil prices on Saudi's fiscal position and economic strength.

Moody’s said the downgrades of nine Saudi banks reflect, to differing degrees, a combination of: (a) the reduced fiscal capacity of the Saudi government to provide support to the banks in times of stress, if needed; and (b) an assessment of each bank's resilience to the weakening domestic operating environment, which the agency expects will dampen funding, asset quality and profitability in the coming quarters.

Moody’s upgrades Polsat to Ba2

Moody's Investors Service said it upgraded the corporate family rating of Cyfrowy Polsat SA to Ba2 from Ba3 and its probability of default rating to Ba2-PD from Ba3-PD.

The outlook is stable.

"Polsat's upgrade reflects not only the benefits of its continued integration of Polkomtel and recent acquisition of Midas but also the company's consistent deleveraging guided by its prudent financial leverage target," Moody's vice president and senior analyst Alejandro Nunez said in a news release.

Moody’s said the upgrade primarily reflects: (a) The progress Polsat has made over the past year in continuing to integrate Polkomtel; (b) Polsat's continuing financing plans aimed at streamlining its debt and corporate structure; (c) the strategic and cost benefits deriving from its recent acquisition of Midas; and, (d) its consistent deleveraging over the past year aimed at achieving its financial policy of target net leverage under 1.75 times over the medium-term.

Moody’s rates DP World program Baa3

Moody's Investors Service said it assigned a provisional Baa3 senior unsecured rating to the $3 billion trust certificate issuance program of DP World Crescent Ltd., a special purpose vehicle established in the Cayman Islands by DP World Ltd. (Baa3 stable).

The outlook is stable.

The provisional Baa3 rating assigned to the program is at the same level as the long-term issuer ratings of DP World, as the sukuk certificate holders in Moody's view will: (a) Effectively be exposed to DP World’s senior unsecured credit risk; (b) not be exposed to the risk of performance of the portfolio assets relating to the certificates; (c) will not have any preferential claim or recourse over the trust assets, or rights to cause any sale or disposition of the trust assets except as expressly provided under the transaction documents (all of which are governed by English law); and (d) only have rights against DP World, ranking pari passu with other senior unsecured obligations as provided in the transaction documents.

Moody’s: Telefonica Finanzas Mexico view to negative

Moody’s Investors Service said it changed the outlook to negative from stable on the national scale ratings of Telefonica Finanzas Mexico SA de CV.

The agency also said it affirmed the company’s Aa2.mx and Baa2 ratings.

The negative outlook follows a similar rating action on its parent company, Telefonica SA, Moody’s explained.

The certificados bursatiles issued by Telefonica Finanzas Mexico are unconditionally and irrevocably guaranteed by Telefonica, the agency said.

The outlook change reflects an expectation that the European Commission´s decision to block the sale of O2 UK will delay Telefonica’s efforts to de-lever, keeping leverage ratios higher for longer than expected and increasing execution risk, Moody’s said.

The company’s ratings are expected to remain weakly positioned and any deviation in the execution of the de-leveraging plan through mid-2017 will most likely trigger a downgrade, the agency added.

Fitch gives BBB- to DP World program

Fitch Ratings said it assigned DP World Crescent Ltd.’s $3 billion global sukuk trust certificate issuance program a BBB- senior unsecured rating.

The program rating is in line with DP World Ltd.'s long-term issuer default rating and senior unsecured rating of BBB-.

The outlook on the issuer default rating is positive.

DP World Crescent is also the trustee of the sukuk, incorporated in the Cayman Islands that has been incorporated solely for the purpose of issuing debt

The trust certificate issuance program's rating is driven by DP World’s issuer default rating and senior unsecured ratings of BBB-. This reflects Fitch's view that a risk of default of these senior unsecured obligations is aligned with that of DP World in accordance with the agency’s rating definitions.

DP World Crescent’s rating is thus linked to DP world’s long-term issuer default rating.

The rating may also be sensitive to changes to the roles and obligations of DP World under the sukuk's structure and documents, Fitch said.

Fitch rates EA Partners II notes B-

Fitch Ratings said it assigned EA Partners II BV's proposed notes an expected senior secured rating of B-(EXP) with a stable outlook. The recovery rating is RR4.

EA Partners II will on-lend the proceeds to respective. These notes are secured over assets that represent senior unsecured claims to the respective obligors.

Fitch said the rating reflects its view of the credit profiles of the obligors and is constrained at B-(EXP) by the obligors of the weakest credit quality.

EA Partners II is a private company with limited liability established solely for the purpose of this transaction, and whose sole shareholder is a foundation.

Fitch gives Posadas notes B+/RR3

Fitch Ratings said it assigned a B+/RR3 rating to Grupo Posadas, SAB de CV's reopening of senior notes due in 2022 for up to $50 million.

Proceeds will be used to refinance the company's $38 million of outstanding notes due in 2017. The additional $12 million will be used for general corporate purposes. After the payment of the notes due in 2017, the total debt will be comprised of $400 million senior notes due in 2022.

The RR3 recovery rating indicates good recovery prospects given default. RR3 rated securities have characteristics consistent with security historically recovering 51%-70% of current principal and related interest.

Fitch said the ratings are supported by Posadas' solid business position as a leading hotel chain in Mexico, strong brand equity and operating performance, as well as its multiple hotel formats. Conversely, the ratings are tempered by high leverage, as well as industry cyclicality.

Posadas' presence in all major urban and coastal locations in Mexico, consistent product offering and brand image have resulted in occupancy levels that are above the industry average in Mexico. The use of multiple hotel formats allows the company to target domestic and international business travelers of different income levels as well as tourists, diversifying its revenue base, the agency said.

Fitch: X5 Finance bonds BB-

Fitch Ratings said it assigned a senior unsecured rating of BB- to X5 Finance LLC's recently issued RUB 5billion bonds, along with a recovery rating of RR5 and a national senior unsecured rating of A+(rus).

X5 Finance is a fully consolidated non-operating subsidiary of X5 Retail Group NV, Fitch said.

Similar to four other bonds issued by X5 Finance, also rated at B-, the new bond only features a surety-ship from the holding company, X5, the agency said.

Therefore, Fitch said it considers these bonds structurally subordinated to other senior unsecured obligations of the group, which are represented by bank debt at the level of operating companies and a RUB 8 billion bond that is covered by surety-ship from CJSC Trade House Perekrestok, the major EBITDA-generating entity within the group.

The agency said it rated the bond one notch less than X5's long-term local-currency rating of BB as prior-ranking debt exceeds 2x of group EBITDA. The company also said it expects the debt mix to be unchanged over the medium term, Fitch said.

The ratings also consider below-average recovery expectations in case of default, the agency said

The ratings take into account X5's strong market position as the second largest food retailer in Russia, Fitch added.

Moody’s assigns Abu Dhabi negative view

Moody's Investors Service said it confirmed Abu Dhabi's long-term issuer ratings at Aa2 and assigned a negative outlook.

Concurrently the short term issuer rating was affirmed at P-1.

This action concludes the rating review for downgrade initiated on March 4.

Moody's decision to assign a negative outlook reflects the lack of clarity around the formulation and implementation of government policies to arrest and reverse the large deficits and the deterioration in the net asset position created by lower oil prices, in the absence of which Abu Dhabi's fiscal buffers will erode over time, exerting downward pressure on the rating.

As part of the action, the agency also confirmed the long-term senior unsecured rating at Aa2/provisional Aa2 and affirmed the short-term senior unsecured rating at provisional P-1.

Moody’s gives Kuwait negative outlook

Moody's Investors Service said it confirmed Kuwait's long-term issuer ratings at Aa2 and assigned a negative outlook.

The action concludes the review for downgrade initiated on March 4.

Moody’s said the negative outlook reflects its view that there remain material uncertainties around the Kuwaiti government's ability to effectively implement its fiscal and economic reform program, which has the stated objective of diversifying and enhancing the economic base and its budgetary revenues.

According to the agency, the Kuwaiti government's inability to do so would be a signal of a level of institutional weakness that is inconsistent with a Aa2 rating.

Kuwait's long-term and short-term foreign-currency bond and deposit ceilings remain at Aa2 and Prime-1, respectively. Its long-term local-currency country risk ceilings also remain at Aa2.

Moody’s gives Kuwaiti banks negative view

Moody's Investors Service said it confirmed the long-term deposit ratings of National Bank of Kuwait SAKP at Aa3 and Kuwait Finance House KSCP at A1 and assigned negative outlooks to the banks' deposit ratings.

At the same time, the agency confirmed both banks' counterparty risk assessments (CR Assessment) at Aa2(cr) and A1(cr), respectively.

This action concludes the review initiated on March 7.

Moody’s said the negative outlook on the banks mirrors the negative outlook on the sovereign rating and captures Kuwait's fiscal pressures, which may weaken its capacity to provide support in the future.

The negative outlook on the sovereign rating reflects the agency’s view that there remain material uncertainties around the Kuwaiti government's ability to effectively implement its fiscal and economic reform program, which has the stated objective of diversifying and enhancing the economic base and its budgetary revenues.

Moody’s revises Poland to negative

Moody's Investors Service said it changed the outlook on Poland's A2/P-1 issuer and government bond ratings to negative from stable and affirmed the ratings.

At the same time, the government's senior unsecured medium-term note and senior unsecured shelf program ratings were affirmed at provisional A2.

Moody’s said the key drivers for the outlook change are:

• Fiscal risks related to a substantial increase in current expenditures as well as the intention to lower the retirement age, the latter raising age-related costs over time; and

• Impairments to the investment climate from a shift towards more unpredictable policies and legislations, as reflected in the ambiguity with respect to the conversion of foreign-currency denominated mortgages and in the prolonged stalemate between the government and the country's constitutional court.

Moody’s gives Qatar negative outlook

Moody's Investors Service said it confirmed Qatar's long-term issuer and senior unsecured debt ratings at Aa2 and assigned a negative outlook.

This action concludes the review for downgrade that was initiated on March 4.

Moody’s said the decision to assign a negative outlook captures the risks emanating from the comparatively stronger general government debt increase from already higher levels. It also takes account of implementation risks related to the Qatari government's reform plans, which the agency assumes in its baseline scenario will be effective in protecting the country's economic and fiscal strengths.

Qatar's long-term and short-term foreign-currency bond and deposit ceilings remain at Aa2 and Prime-1, respectively. Its long-term local-currency country risk ceilings also remain at Aa2.

Moody’s assigns negative view to UAE

Moody's Investors Service said it confirmed the Aa2 long-term issuer ratings of the United Arab Emirates (UAE) and assigned a negative outlook.

The actions conclude the review for downgrade initiated on March 4.

Moody's said its decision to assign a negative outlook to the rating reflects the lack of clarity around the formulation and implementation of government policies to arrest and reverse the large deficits and the deterioration in the net asset position created by lower oil prices, in the absence of which the UAE's fiscal buffers will erode over time, exerting downward pressure on the rating.

The UAE's long-term and short-term foreign- currency bond and deposit ceilings remain unchanged at Aa2 and Prime-1, respectively. Its long-term local- currency bond and deposit ceilings also remain unchanged at Aa2.

S&P affirms LG Chem at A-

S&P said it affirmed its A- long-term corporate credit rating on LG Chem Ltd.

The outlook is stable.

“Our rating affirmation reflects our expectations that LG Chem’s diversified product portfolio and good market position in petrochemicals, and its prudent financial strategy will allow the company to sustain its credit strength,” S&P said in a news release.

S&P affirms Mondi Group

S&P said it affirmed its BBB long-term corporate credit rating on Mondi Group. The outlook is stable.

At the same time, S&P affirmed the BBB issue rating on the senior unsecured debt issued by Mondi Finance plc.

S&P said the affirmation follows Mondi’s strong 2015 results and S&P’s forecast of further improvements to its credit metrics. S&P said it has accordingly raised the financial risk assessment on the group to modest from intermediate.

S&P affirms PT Sri Rejeki Isman

S&P said it affirmed the BB- long-term corporate credit rating on PT Sri Rejeki Isman Tbk. (Sritex). The outlook remains negative.

S&P said it also affirmed the Asean regional scale rating on Sritex at axBB. In addition, S&P affirmed the BB- long-term issue rating on the notes issued by Golden Legacy Pte. Ltd. and guaranteed by Sritex.

“In our view, Sritex has yet to demonstrate an ability to manage rising seasonal peaks in working capital. We believe this, along with the company’s intention to maintain steady growth and investments, could test its liquidity position,” S&P said in a news release. “We therefore keep our rating outlook on negative.”

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