Moody's upgrades six Gulf countries

Moody's Investors Service said it upgraded the long-term foreign- and domestic-currency government bond ratings of six Gulf countries: Bahrain (A3/positive outlook from Baa1); Kuwait (Aa3/stable outlook from A2); Oman (A3/positive outlook from Baa1); Qatar (Aa3/stable outlook from A1); Saudi Arabia (A2/positive outlook from A3) and the United Arab Emirates (Aa3/stable outlook from A1).

The country ceilings for long-term foreign-currency bonds have been upgraded in the case of Bahrain (A1/positive outlook from A2), Kuwait (Aa2/stable outlook from Aa3), Oman (A1/positive outlook from A2) and Saudi Arabia (Aa3/stable outlook from A1).

Moody's also assigned a long-term domestic-currency government bond issuer rating to the United Arab Emirates of Aa3 with a stable outlook; upgraded the country ceiling for long-term foreign-currency bank deposits of Bahrain (A3/positive outlook from Baa1), Kuwait (Aa3/stable outlook from A2), Oman (A3/positive outlook from Baa1), Qatar (Aa3/stable outlook from A1), Saudi Arabia (A2/positive outlook from A3) and the United Arab Emirates (Aa3/stable outlook from A1); upgraded the country ceiling for short-term foreign-currency bank deposits of Saudi Arabia (P-1 from P-2); and upgraded Saudi Arabia's local-currency ceiling and bank deposit ceiling to Aa3 from A1.

The agency said the ratings reflect the significant strengthening of the country's public and external finances.

"The marked improvement in the economic fundamentals of the Gulf countries has mainly been caused by the sustained rise in global hydrocarbon prices over the past five years," Tristan Cooper, vice president at Moody's London office, said in an agency rating.

While the regional political environment remains challenging, Moody's said, improvement in the economic strength of the Gulf states justifies the upgrade.

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