Moody’s upgrades over half a dozen Qatari companies

DOHA: As an act of reassurance to global investors’ growing confidence in Qatari economy, the credit-rating giant Moody’s Investors Services (Moody’s) yesterday changed the ratings of over half a dozen Qatari companies’ ratings to stable from negative. The global ratings agency’s decision follows its action to affirm ratings of 10 Qatari banks and changing their outlook to stable, early this week.

Moody’s yesterday’s decision to upgrade the ratings includes QP, Industries Qatar, QEWC, Nakilat, RasGas II-3, Dolphin Energy and Al Rayan.

Moody’s changed the outlook on the Aa3 long-term issuer rating of Qatar’s national oil and gas company Qatar Petroleum (QP) to stable from negative, the A1 long-term issuer rating of QP subsidiary Industries Qatar (IQ), and the A1 long-term issuer rating of Qatar Electricity and Water Company (QEWC) were also changed to stable from negative. Concurrently, Moody’s has affirmed the ratings on all three government-related issuers (GRIs).

Moody’s also changed the outlook on the long-term issuer rating and senior unsecured bond ratings of government-owned Qatari Diar’s special purpose vehicle Qatari Diar Finance QSC (QDF) to stable from negative and affirmed the Aa3 issuer and bond ratings.

In a separate action, the global credit ratings agency affirmed the A1 guaranteed senior secured debt ratings of Ras Laffan Liquefied Natural Gas Co Ltd (II) (RasGas II) and Ras Laffan Liquefied Natural Gas Co Ltd (3) (RasGas 3), together RasGas II-3. The outlook has been changed to stable from negative.

The ratings agency also affirmed the A1 senior secured debt rating and the A2 senior subordinated debt rating of Nakilat. Nakilat’s outlook has also been changed to stable from negative.

On affirming the A2 rating of Dolphin Energy Limited’s (Dolphin Energy) senior secured bonds and senior secured bank credit facilities and changing the outlook to stable from negative, Moody’s said: “The stabilisation of the outlook reflects that Dolphin Energy’s operational and financial performance has remained satisfactory and in line with Moody’s expectations…”

The key driver of the change in rating outlook to stable is Moody’s assessment that Qatar can withstand the economic, financial and diplomatic boycott by the three neighbouring Gulf Cooperation Council (GCC) countries and Egypt in its current form, or with possible further restrictions, for an extended period of time without a material deterioration of the sovereign’s credit profile. This assessment is in part based on evidence of broad resilience of Qatar’s credit metrics to the economic and financial blockade over the past 13 months.

“The stable outlook on the government bond ratings of Qatar reflects Moody’s view that Qatar’s credit metrics will likely remain consistent with a Aa3 rating as the boycott continues.”

“The stable outlook includes the possibility of some additional restrictions, and is also supported by Moody’s view that, while a quick resolution of the GCC diplomatic stand-off is very unlikely in the next 12-18 months, a significant escalation that would materially erode Qatar’s credit metrics is also a very low-probability event,”, the ratings agency said.

Early this week, Moody’s had affirmed the long-term deposit and issuer ratings of the 10 banks it rates in the State of Qatar, as well as the senior unsecured and subordinated debt ratings of their affiliated entities.

Moody’s had also affirmed the banks’ baseline credit assessments (BCA), adjusted BCAs, Counterparty Risk Assessments (CRAs) and Counterparty Risk Ratings (CRRs).

At the same time, the rating agency changed the outlook on the long-term deposit, issuer and senior unsecured debt ratings to stable from negative.

These banks are Qatar National Bank, Doha Bank, Al Khalij Commercial Bank, Ahli Bank, Barwa Bank, International Bank of Qatar, Masraf Al Rayan, QIIB and QIB and the Commercial Bank. The rating action was primarily driven by resilience of the Qatari banks.

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