27 Nov 2024
RIYADH: Moody’s has upgraded the ratings of six major government-related institutions in Saudi Arabia, including the Public Investment Fund, to Aa3 from A1.
The move reflects strong sovereign backing and stable credit linkages to the government.
The agency also assigned the Aa3 rating to Saudi Aramco, Saudi Basic Industries Corp., and Saudi Electricity Co., as well as Saudi Power Procurement Co., and Saudi Telecom Co.
Moody’s assigns an Aa3 rating to companies with high quality, low credit risk, and strong ability to repay short-term debts, providing an assessment of the creditworthiness of borrowers, including governments, corporations, and other entities that issue debt.
“The rating action is a direct consequence of the sovereign rating action and reflects the credit linkages between the Government of Saudi Arabia and each of the six entities,” said Moody’s.
It added: “While several of these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.”
The strong ratings received by these firms is an indication of Saudi Arabia’s robust economic stability, following Moody’s upgrade of the Kingdom’s credit rating to Aa3 with a stable outlook in November.
In May, Fitch Ratings upgraded Saudi Arabia’s credit rating to A+ with a stable outlook.