Moody’s downgrades Bahrain a notch with negative outlook

Moody's Investors Service has downgraded Bahrain's government bond ratings by one notch to Baa1 from A3, and assigned a negative outlook to the rating.
The rating agency’s decision to downgrade was driven by the likely adverse effect of the recent political turmoil on the country's growth prospects and its public finances, continuing increases in the break-even oil price that is needed to balance the budget, and a weakening of the fundamental strength of Bahrain's large banking sector.
Political tensions in the country remain high and there seems little prospect of the underlying causes of the unrest being peaceably resolved, at least over the short term. The political outlook is therefore highly uncertain, Moody’s said, adding that these events are likely to have damaged economic growth significantly, especially in services sectors such as tourism, trade and financial services.