Moody’s downgrades Bahrain’s sovereign rating on break-even oil price, banking sector

Moody’s downgrades Bahrain’s sovereign rating

MANAMA, Bahrain — Moody’s Investor Service says it has downgraded Bahrain’s sovereign rating, citing the country’s increasingly high price of oil needed to balance its budget.

The ratings agency in a statement Monday also cited a negative outlook about the island nation’s banking sector and added it had downgraded ratings for several Bahrain-based banks over the past two years.

Bahrain’s local and foreign currency debt ratings were lowered from A2 to A3, still within investment grade, with a stable outlook.

Moody’s said Bahrain’s break-even price for the benchmark Brent crude had climbed from $30 in 2004 to almost $80 per barrel in 2009.

Bahrain, the smallest of the six Gulf Cooperation Council nations, halted billions in projects in 2009 amid the global financial meltdown.