Saudi Arabia’s Sovereign Ratings Affirmed; Outlook Revised to Negative Rating Action
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Summary
Ref: SA20CRA00-02 18 December 20 20
Saudi Arabia’s Sovereign Ratings Affirmed; Outlook Revised to Negative Rating Action
Capital Intelligence Ratings (CI Ratings or CI ) today announced that it has revised the Outlook on Saudi Arabia’s Long-Term Foreign Currency Rating (LT FCR) and Long-Term Local Currency Rating (LT LCR) to Negative from Stable. At the same time, the sovereign’s LT FCR and LT LCR have been affirmed at ‘A+’ , while its Short-Term Foreign Currency Rating (ST FCR ) and Short-Term Local Currency Rating ( ST LCR ) have been affirmed at ‘A1’.
Rating Rationale
The revision of the O utlook to Negative reflects a weakening of the government’s fiscal position as the Covid-19-related slump in global oil demand has aggravated already significant budgetary pressures. In addition, the revision reflects our view that the government ’s debt burden – while still relatively low – will rise markedly in 2020-21…