ECONOMY

Moody’s downgrades ratings of major government firms in Qatar

Moody’s Investors Service. (Screengrab)

 Moody's downgraded ratings of major firms in Qatar from AA3 to AA2, given the country's weak external position and the uncertainties surrounding the growth model's sustainability.

The agency cut credit ratings for major oil and gas companies, industry and real estate in Qatar.

The most prominent of these companies are RasGas, an energy and gas specialist, as well as Qatar Petroleum, Ras Laffan City and Industries Qatar.

It also lowered the credit rating of Aldar Properties and Nakilat specialized in shipping and also lowered its forecast of QNB bank's ability to meet long-term operational and contractual obligations.

The cuts come, according to Moody’s, due to the strong relationship between the Qatari government and those companies.
As for Qatar Petroleum, it is owned by the government, providing around 75% of direct and indirect revenues; a significant share of the country's GDP.

Despite the downgrade of Qatar Petroleum, Moody's reported that the company still has a strong financial position, especially after it improved the efficiency of operation with the integration of some new operations to its portfolio.

Moody's confirmed that it may raise the rating, but this is conditional to the bank's financial performance after expanding outside Qatar and in the case of expanding its base of depositors and borrowers.

Moody's said it may raise or lower the credit rating of these companies in line with any reduction or increase of Qatar's sovereign rating, adding that it may reduce the rating of companies in case of declining contact with government support.

 

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Last Update: Wednesday, 31 May 2017 KSA 14:26 - GMT 11:26
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