Global Arab Network | Moody's rates Qatar sovereign bonds Aa2

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Moody's rates Qatar sovereign bonds Aa2

Global Arab Network - - Maha Karim

Friday, 03 April 2009 15:46

Moody's Investors Service has assigned foreign currency ratings of Aa2 to the dollar-denominated senior unsecured bonds issued today by the government of Qatar. These ratings are in line with the government of Qatar's existing issuer ratings, which are also Aa2 with a stable outlook.

The total size of today's bond issuance was US$3 billion, which is split into two tranches: a US$2 billion tranche maturing in 2014 and a US$1 billion tranche maturing in 2019. The government has stated that the proceeds from the bonds will be used for general funding purposes, including the provision of contingency funding to entities owned or controlled by the government.

Moody's says that the government of Qatar's Aa2 issuer ratings are supported by the country's very high level of prosperity; the wide, albeit narrowing external current account surplus; the government's strong balance sheet; and the rapid expansion of gas exports which will significantly boost government revenues over the coming years.

Credit concerns for Qatar include the steep rise in government expenditure; persistent, albeit easing inflationary pressures; a volatile regional geopolitical environment; weaker institutions than higher-rated countries; a relatively undiversified economy; and, in Moody's opinion, the government's substantial domestic contingent liabilities.

Moody's last rating action on Qatar was implemented on 24 July 2007, when the rating agency upgraded the government's issuer ratings to Aa2 from Aa3 to reflect the significant strengthening of the public and external finances.

The principal methodology used in rating the government of Qatar is Moody's Sovereign Bond Methodology, published in September 2008 and available on www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies sub-directory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory on Moody's website.

Global Arab Network

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