Moody’s downgrades Azerbaijan

Moody's Investors Service said it downgraded the government of Azerbaijan's issuer and senior unsecured debt ratings to Ba2 from Ba1 and changed the outlook to stable, concluding the review for downgrade initiated on May 19.

The agency also downgraded the senior unsecured debt rating of Southern Gas Corridor CJSC, whose bonds are backed by the government's guarantee, to Ba2 from Ba1 and changed the outlook to stable.

Moody’s said the downgrade reflects the significant and long-lasting weakening of Azerbaijan's fiscal and economic strength, which is driven by the ongoing impact of lower oil prices, the country's declining oil production potential and its very weak banking system. Together these factors will continue to constrain growth and pose material contingent liability risks to the sovereign.

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