Fitch affirms Iraq at 'B-'; outlook stable

[salt-life]

Fitch confirms its credit ratings for Iraq with a stable outlook

Editorial Date: 2017/12/6 19:54 • 62 times read

[Ayn- 
Fitch ] Fitch Ratings maintained its Iraq rating at "B-" with a stable outlook.

The agency also confirmed its long-term foreign currency debt default rating at "B-" with a stable outlook. 
Fitch predicted Iraq's oil production and exports would stabilize at high levels in 2018 and assume that the government would allocate similar amounts in the budget to pay the money owed to international oil companies. 
She said Iraq's implementation of a three-year loan agreement with the International Monetary Fund was different and slower than planned.

 

http://www.alliraqnews.com/modules/news/article.php?storyid=69030

[10 YEARS LATER]

FITCH is privy to info we are not - this rating is not all that bad, considering.

[TexasMike1958]

18 minutes ago, 10 YEARS LATER said:

FITCH is privy to info we are not - this rating is not all that bad, considering.

 

Yes, but LGD said that there were reports Iraq would be getting an A rating from Fitch and S & P.  B- is a LONG way from A.

[mr.unlikely]

It’s been B- for a while now. My hope is that after the announcement of a fully liberated Iraq, the credit rating will get an upgrade to investment grade. Anything in the A range would be sufficient. 

[Butifldrm]

Fitch decides to keep its ratings for Iraq

SECTION: ECONOMICDECEMBER 6, 2017 | 5:44 PM

Fitch decides to keep its ratings for Iraq

 

BAGHDAD (Reuters) - International credit rating agency Fitch Ratings on Wednesday closed its outlook for Iraq unchanged with a stable outlook, while noting that Baghdad's implementation of an agreement with the IMF "is different and slower than planned."

"Fitch has kept its credit ratings for Iraq unchanged with a stable outlook," CNBC Arabiya said.

"Iraq's implementation of a three-year loan agreement with the International Monetary Fund is different and slower than planned."

 

http://www.albaghdadiyanews.com/?p=83122

[davis411]

fitch this

[yota691]

«Moody's»: to maintain the classification of Iraq with a stable outlook

Dec 07, 2017

MANAMA: Moody's Investors Service said it has maintained a stable outlook for Iraq with a stable outlook, adding that it has confirmed its long-term risk rating for foreign currency default at BN minus.

Three months ago, Standard & Poor's affirmed its credit rating for Iraq at B / B minus with a stable outlook, but predicted that the cut in oil production would affect economic growth in 2017.

Fitch expected Iraq's production and exports to stabilize at levels High next year 2018.

The decline in crude prices since 2014, had a profound impact on the Iraqi economy.

Fitch said that Baghdad's implementation of an agreement with the International Monetary Fund (IMF) on a three-year demand loan is going slower than planned.

In May 2016, Iraq agreed with the International Monetary Fund (IMF) to lend it $ 5.4 billion in an agreement that could then lead to additional $ 15 billion in international aid in the next three years.

 

[DIAMOND]

just spit ballin here, but wouldn't a rv make the credit reating soar 

[yota691]

GCC 

Moody's is optimistic about the future of Gulf banks

Source:

• Ⅶdby - Ashraf Rafiq

Date:07 December 2017

 

Moody's Investors Service expected a stable future for GCC banks, saying the GCC banks' outlook is stable due to their strong economic fundamentals, especially in strong banking systems that are resilient to profit despite economic challenges and geopolitical and financial challenges facing some countries.

The World Credit Rating Agency (WAFC) has forecast that real GDP growth in the Gulf will accelerate to about 2 percent in 2018 from zero in 2017 as oil prices stabilize between $ 50 and $ 60 a barrel.

Hosting the 2020 Expo in Dubai and the Saudi National Transformation Program will help raise capital spending and increase lending, boosting capital spending. The agency predicted growth in the lending rate next year by 5%.

"The outlook for Gulf banks is that the capital levels of the Gulf banks will remain largely stable above Basel III minimum regulatory requirements in the context of limited credit growth in 2018," the report said.

[yota691]

Fitch confirms Iraq's credit rating with a stable outlook

Fitch expected Iraq's oil production and exports to stabilize in 2018 at high levels

 

 06 December 2017 08:07 PM

Mubasher: Fitch Ratings affirmed the level of Iraq at (-B) with a "stable" outlook .

Fitch affirmed its long-term foreign currency risk rating at (-B) with a stable outlook, Reuters reported.

The credit rating agency predicted that Iraq's oil production and exports will stabilize during the coming year 2018 at high levels, assuming that the government allocates the Arab state cash amounts from the budget to pay the dues to international oil companies .

Fitch added that the three-year "demand" loan agreement with the International Monetary Fund (IMF) is moving in a different direction and slower than planned .

[Gypsygirl11]

1 hour ago, yota691 said:

(IMF) on a three-year demand loan is going slower than planned.

No surprise there !!!

[yota691]

Fitch keeps its credit ratings for Iraq unchanged

 

Wednesday, December 6

 

 

 

 

Alsumaria News / Baghdad has kept "Fitch" Foundation International credit rating, on Wednesday, their ratings for Iraq with no change with a stable outlook, as pointed out that Baghdad 's implementation of the agreement with the IMF "mixed and slower than planned." "Fitch has kept its credit ratings for Iraq unchanged with a stable outlook,  " CNBC Arabiya said.  " Iraq's implementation of a three-year loan agreement with the International Monetary Fund is different and slower than planned."

[10 YEARS LATER]

6 hours ago, TexasMike1958 said:

 

Yes, but LGD said that there were reports Iraq would be getting an A rating from Fitch and S & P.  B- is a LONG way from A.

 

You are so right - Iraq will get there " in the near future "  Kidding aside, as long as Iraq is seen to show steady forward progress, ( & they're not derailed ) I have no doubts whatsoever, Iraq will have That " A " rating: a year or two, maybe ?  Sooner perhaps . . . Their future is wide open.

[salt-life]

 Fitch maintains Iraq's rating with a stable outlook

12-7-2017

Economy News _ Baghdad The Fitch Ratings International said it has maintained its rating of Iraq unchanged with a stable outlook.    "Fitch said in a statement read by the Economist News on Thursday that it affirmed its rating of the risk of default in foreign currency in term Long at "B-".    Three months ago, Standard & Poor's affirmed its credit rating for Iraq at B- / B with a stable outlook, but expected oil production cuts to affect economic growth in 2017.    Fitch expected Iraqi production and exports to stabilize at high levels Next year 2018.    Iraq, the second largest oil exporter in the Organization of Petroleum Exporting Countries, "OPEC", which agreed last weekend, to extend the agreement to reduce oil production until the end of 2018, to restore the balance between supply and demand, and then improve oil prices. Iraq relies on revenues from the sale of oil to finance up to 95 percent of state expenditure.    The fall in crude prices since 2014 has had a major impact on the Iraqi economy.    Fitch said Baghdad's implementation of an agreement with the International Monetary Fund (IMF) on a three-year demand loan was running slower than planned.    In May 2016, Iraq agreed with the International Monetary Fund (IMF) to lend it $ 5.4 billion in an agreement that could then lead to additional $ 15 billion in international aid in the next three years.

http://economy-news.net/content.php?id=10072 

[salt-life]

Fitch maintains Iraq's rating with a stable outlook

07/12/2017 11:14 | Number of readings: 156

font size:  

 

Trend Press / New York

 

Fitch Ratings said it kept its rating of Iraq unchanged with a stable outlook .

 

Fitch said in a statement seen by Trend Press on Thursday that it affirmed its long-term foreign currency default risk rating at B- .

 

Three months ago, Standard & Poor's confirmed its credit rating for Iraq at B- / B with a stable outlook, but expected oil production cuts to affect economic growth in 2017 .

 

Fitch expected Iraq's oil production and exports to stabilize at high levels next year 2018 .

 

Iraq, OPEC's second-largest oil exporter, agreed last weekend to extend an oil production cut to the end of 2018 to restore the balance between supply and demand and thereby improve oil prices .

 

Iraq relies on revenues from the sale of oil to finance up to 95 percent of state expenditure . 

 

The fall in crude prices since 2014 has had a major impact on the Iraqi economy .

 

Fitch said Baghdad's implementation of an agreement with the International Monetary Fund (IMF) on a three-year demand loan was running slower than planned .

 

In May 2016, Iraq agreed with the International Monetary Fund (IMF) to lend it $ 5.4 billion in an agreement that could then lead to additional $ 15 billion in international aid in the next three years .

 

http://aletejahtv.org/permalink/195144.html

Edited December 7, 2017 by salt-life

[yota691]

#IRAQ | 30 JULY, 2018

Fitch affirms Iraq at 'B-'; outlook stable

Fitch Ratings has affirmed Iraq's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B-' with a Stable Outlook.

By Staff Writer, Reuters News

(The following statement was released by the rating agency)

 

Fitch Ratings-Hong Kong-July 30: Fitch Ratings has affirmed Iraq's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B-' with a Stable Outlook.

A full list of rating actions is at the end of this rating action commentary.

 

KEY RATING DRIVERS

Iraq's rating is constrained by commodity dependence, weak governance, high political risk, and an undeveloped banking sector, while the rating is supported by GDP per capita, robust FX reserves, a low level of debt service obligations and international financial support.

 

Higher oil prices helped narrow the budget deficit significantly in 2017, with the IMF estimating that the deficit shrank to 2.3% of GDP from 13.9% in 2016. The government will earn significantly more oil revenue than it assumed in the 2018 budget, and even with an expenditure response, is likely to record a budget surplus, of around 3% of GDP, after five years of deficits. For each USD1 higher oil price, the government receives approximately an extra USD1.2 billion in revenue, assuming stable export volume.

The 2018 budget, which targeted an overall deficit of IQD12 trillion, assumed an oil price of USD46/barrel and exports of 3.9m b/d (including 250,000 b/d from the Kurdistan Regional Government (KRG) and 300,000 b/d from Kirkuk). We assume that the price of Iraqi oil will average USD64/b (Brent crude average of USD70/b) and that federal oil exports flowing into the budget will average 3.45m b/d. This implies an extra IQD19 trillion in revenue.

Iraq's public and external finances remain vulnerable to a renewed slump in the oil price. Commodity dependence is among the highest of all Fitch-rated sovereigns. Oil accounts for 85%-90% of fiscal revenue and almost all export revenue. In 2019-2020, under our assumption that average Brent crude oil prices decline to USD65/b and USD57.5/b, we forecast that a budget deficit (of around 2% of GDP) will re-emerge in 2020. This forecast assumes further modest increases in investment spending, limited by capacity constraints, and in current spending. A ramp up in reconstruction spending could put additional pressure on the budget.

Public debt edged down in nominal terms in 1Q18, with excess oil revenue allowing for some repayment of debt. The government is not planning to issue a Eurobond this year. We forecast government debt/GDP to fall to 49.9% of GDP in 2018 and 48.7% in 2019 on the back of budget surpluses and the uplift to nominal GDP in 2018 from higher oil prices. We forecast government debt/GDP will increase again, to 50.4%, in 2020 as oil prices drop back and a budget deficit re-emerges.

Iraq's total debt stock includes an estimated USD41 billion of debt lent to Iraq by GCC countries during the 1980-1988 Iran-Iraq war, which the authorities do not face pressure to repay or service. If this debt were restructured on the same terms as Paris Club debt was restructured in 2004-06, government debt/GDP would be around 34% in 2018, about half the current 'B' peer median. The majority of remaining external debt is owed to the Paris Club and multilateral and bilateral institutions. Annual external debt service costs are relatively low (forecast at roughly USD2.5-USD3.5 billion in 2018-20), especially given the level of FX reserves.

The Central Bank of Iraq's (CBI) stock of international reserves (including gold) was USD48.9 billion at end-2017, up from USD45.3 billion at end-2016. We forecast that reserves will average USD54 billion in 2018-2019. The increase in reserves is supportive of the exchange rate peg and the gap has narrowed between the auction rate and market rate of the Iraqi dinar.

Iraq's three-year Stand-By Arrangement (SBA) with the IMF is on hold, after one year of mixed implementation. This highlights the difficulty of enacting fiscal and structural reforms in Iraq because of weak governance systems and political constraints. Approval of the third review has been pending since late 2017, held up by disagreement over the 2018 budget in the context of an impending parliamentary election, the dispute between the federal government and the KRG and higher oil prices. The IMF is open to re-engaging with Iraq when a new government is formed. Iraq continues to receive other bilateral and multilateral support.

Political risk and insecurity in Iraq remain among the highest faced by any Fitch-rated sovereign. Iraq scores the worst of all Fitch-rated sovereigns on the composite World Bank governance indicator. This reflects not only insecurity and political instability but also corruption, government ineffectiveness and weak institutions. Nevertheless, the bulk of oil production facilities and export infrastructure are located away from the areas that have presented the highest security risk.

Iraq continues to face pressing political challenges, although security has improved with the recapture of territory in 2017 from the jihadist Islamic State. Government formation is proceeding slowly following the parliamentary election in May. We expect the eventual formation of a broad-based government that will struggle to implement more than piecemeal reforms. Low voter turnout and mounting protests since the election highlight high levels of popular dissatisfaction with the political class. Protests have taken place outside oil facilities, demanding more jobs from the oil sector. Such protests, which have occurred before, have not caused interruptions to oil production or exports and we assume that remains the case.

The banking sector is under-developed and fundamentally weak. It is not in a position to provide much domestic financing to the government. Private sector credit to GDP is one of the lowest of any Fitch-rated sovereign. The two large state-owned banks, Al-Rafidain and Al-Rasheed, which have high non-performing loans and exceptionally low capital adequacy, dominate the sector. The government has appointed auditors as required by the IMF, but it remains unclear how the banks will be restructured.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Iraq a score equivalent to a rating of 'B+' on the Long-Term Foreign-Currency (LT FC) IDR scale.

Fitch's sovereign rating committee adjusted the output from the SRM to arrive at the final LT FC IDR by applying its QO, relative to rated peers, as follows:

- Structural features: -2 notches, to reflect political and security risks which are not sufficiently captured by the governance indicators in the SRM and because of the exceptionally weak banking sector.

- Public finances: +1 notch to adjust for the legacy debt to GCC countries and to reflect ongoing bilateral and multilateral financial support.

- Macro: -1 notch to reflect the weakness of the policymaking framework, in particular related to reform of the public finances.

Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead to positive rating action are:

- A period of oil prices in excess of our current forecasts, particularly if combined with higher oil production and exports and leading to an improvement in Iraq's public and external finances.

- A sustainable improvement in the country's security that allows for stronger non-oil economic development.

- A greater degree of political stability which allows for improvements in policymaking, including reforms of the public finances.

The main factors that could, individually or collectively, lead to negative rating action are:

- Failure to secure adequate fiscal financing.

- Deterioration in the country's security, particularly if insecurity hinders oil production and exports.

KEY ASSUMPTIONS

Fitch forecasts Brent crude to average USD70/b in 2018, USD65/b in 2018 and USD57.5/b in 2019. We assume that Iraqi oil sells at a consistent discount to Brent. Fitch forecasts Iraqi oil exports (excluding exports from the Kurdish region) to average 3.55m b/d in 2018-20.

Fitch does not incorporate into its fiscal numbers a full oil-sharing agreement between the central government and the Kurdish Regional Government, given the patchy track record for implementing this agreement. An agreement may be more likely after a new government is formed.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR affirmed at 'B-'; Outlook Stable

Short-Term Foreign-Currency IDR affirmed at 'B'

Country Ceiling affirmed at 'B-'

Issue ratings on long-term senior unsecured foreign-currency bonds affirmed at 'B-'

 

[yota691]

Monday, July 30, 2018 10:52 pm

| Number of readings: 242                                                                                                                                                                                                                          Iraq remains in the international credit rating "b". The risk of repayment of foreign currency debt is high

Fitch Ratings International said on Monday it kept its rating of Iraq unchanged at B with a stable outlook.

 

Fitch said in a statement that it had confirmed its long-term risk rating for foreign currency debt default at " B ", which means high risk.

 

The classification of Iraq was constrained by weak governance, high political risk and the uncooperative banking sector.

 

The Iraqi economy and its banking sector face risks associated with the political and security tensions that have plagued the country since 2003.

 

Fitch said that Iraq still faces political risks and insecurity among the highest levels faced by any sovereign body classified by the institution.

 

"This reflects not only political instability, but corruption and inefficiency of the government and weak institutions," he added.

 

However, most of the oil production facilities and export infrastructure are located far from the areas that have the highest security risks, according to Fitch.

 

Iraq, the world's second-largest oil exporter, relies on oil revenues to finance up to 90 percent of state spending.

 

Fitch added that high oil prices helped to reduce the budget deficit significantly last year, with the deficit shrinking to 2.3 percent of GDP from 13.9 percent in 2016, while the government will earn oil revenues much larger than was assumed in the budget for 2018.

 

 

[Butifldrm]

Fitch" is likely to achieve Iraq surplus balance of 2018 and confirm its sovereign rating

Rising oil prices helped reduce the budget deficit

 

 

 

 31 July 2018 11:50 p

 

Direct: Agency confirmed Fitch Ratings assessment of Iraq 's sovereign assets, with a stable outlook.

The Agency maintained its assessment of long-term State assets denominated in foreign currency at grade B and at short-term B.

Fitch predicted that Iraq would achieve surplus in its budget by the end of this year after five consecutive years of deficit.

She explained that the high oil prices, helped to reduce the budget deficit, and reduced the deficit last year to 2.3% of GDP, compared to about 13.9% in 2016.

The agency forecast an average oil price this year at $ 70 a barrel.

The agency noted that the sovereign assessment of Iraq has been affected by several factors, the most important of which is exposure to the risk of inability to meet long-term obligations, as well as political risks and undeveloped systems in the banking sector.

It was Iraq 's revenues from crude oil rose during the first half of this year , to 40.35 billion, compared to revenues of $ 27.64 billion, in the first half of last year.

https://www.mubasher.info/news/3321704/-فيتش-ترجح-تحقيق-العراق-فائض-بموازنة-2018-وتؤكد-تصنيفها-السيادي