Fitch upgraded its rating on the Government of Egypt by one notch to B+ on 21 March, one notch higher than S&P and two higher than Moody's.
Three Gulf states to provide $12bn to Bahrain
Under the agreement with Kuwait, Saudi Arabia and the UAE, Bahrain will receive $2bn of the $10bn five-year financial package by the end of 2018, with the rest being paid by the end of 2022.
The announcement of the support package was accompanied by the publication by the Bahrain Ministry of Finance of a five year Fiscal Plan. This explains that the $10bn support package willcover 50% of the country's financing requirements up to 2022. It will be deployed both to fund the repayment of outstanding debt and to fund budget deficits. The Fiscal Plan shows that actual budget deficits were around $4bn in each of 2015, 2016 and 2017.
The Plan envisages eliminating the budget deficit in 2022. Key measures to achieve this include rationalising the expenditure of the water and electricity authorities, introducing a voluntary retirement scheme for government employees, and a more focussed approach to cash subsidies for citizens.
A few weeks ago, Bahrain raised $500mn in a private placement with five GCC banks: Bank-ABC, Emirates NBD, Kuwait Finance House, Noor Bank and Sharjah Islamic Bank. It raised $3bn in long-term debt in September 2017.
Bahrain's economy and its government's finances have been badly hit by the fall in oil prices in recent years and both remain under strain depsite the recent increase in prices.
Bahrain was rated BBB by all three major rating agencies in mid-2014, but now holds a BB- rating from Fitch, B+ from S&P and B2 from Moody's.
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