Saudi Rating Cut for First Time at Fitch on Lower Oil Pricesby
Rating already downgraded by Standard & Poor's, Moody's
Saudi stock market benchmark index maintains gains after move
Saudi Arabia’s credit worthiness was downgraded at Fitch Ratings after the plunge in oil prices.
The kingdom’s rating was lowered one level to AA-, the fourth-highest investment grade, the rating agency said on Tuesday. It maintained a negative outlook for the credit, signaling the possibility of more downgrades.
The cut reflects the “revision of our oil price assumptions for 2016 and 2017” to $35 a barrel and $45 a barrel respectively, it said.
The reduction is the first time Fitch has downgraded Saudi Arabia since at least 2004. It ranks the country at the same level as the Aa3 grade Saudi Arabia is rated by Moody’s. Standard & Poor’s rates the nation three steps lower at A-. The AA- rating puts the kingdom on par with South Korea and Macau.
The Saudi stock exchange’s market capitalization has fallen by almost $50 billion since the kingdom’s credit rating was first cut at the end of October, with the benchmark Tadawul All Share Index down 10 percent. The index maintained its 1.3 percent advance after Fitch’s downgrade on Tuesday.