Egypt downgraded by Moody’s, again | beyondbrics – FT.com

Moody’s Investors Service had downgraded Egyptian bonds to Ba3, three levels below investment grade, as protests and violence continue and the country comes no closer to making the transition to civilian government.

It’s the second time Moody’s has downgraded Egyptian debt since protests began in late January, forcing former president Hosni Mubarak to sand down on February 11.

Egypt’s foreign and local currency government bonds were downgraded to Ba3 from Ba2, to which they were previously downgraded on January 31. The outlook on the ratings remained negative. Moody’s said in a statement:

Today’s rating action was prompted by:

1) The prolonged political uncertainty in Egypt since our last rating action on 31 January, and our concerns about whether a transition to an effective and stable government will be achieved.

2) The adverse impact this political uncertainty is having on the country’s fiscal position and broader economic performance.

3) The deterioration of the political situation in Libya, which has negative implications for Egypt’s economy and security.

In Moody’s opinion, these developments have caused a further erosion of Egypt’s credit fundamentals relative to rating peers.

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