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Moody's acts on 4 Bahraini lenders following sovereign downgrade

Moody's on July 31 took various ratings actions on four Bahraini lenders after the agency's July 28 downgrade of Bahrain's issuer rating to B1 negative from Ba2 negative.

The rating agency downgraded BBK BSC's and National Bank of Bahrain BSC's long-term local-currency deposit ratings to B1 from Ba2. Also downgraded were the two banks' long-term foreign-currency deposit ratings to B2 from Ba3, their baseline credit assessments to "b1" from "ba2," and their long-term counterparty risk assessments to Ba3(cr) from Ba1(cr).

At the same time, Moody's downgraded the long-term local-currency issuer ratings of Bahrain Islamic Bank BSC and Khaleeji Commercial Bank BSC to B1 from Ba3, as well as their long-term foreign-currency issuer ratings to B2 from Ba3.

The agency also upgraded Bahrain Islamic Bank's baseline credit assessment to "b2" from "b3," in line with the bank's improved financial position, while downgrading its long-term counterparty risk assessment to B1(cr) from Ba2(cr).

Khaleeji Commercial Bank's counterparty risk assessment was downgraded to Ba3(cr) from Ba2(cr), while its baseline credit assessment was affirmed at "b1."

In addition, Moody's maintained the negative outlooks on National Bank of Bahrain, BBK and Khaleeji Commercial Bank, while the outlook for Bahrain Islamic Bank was revised to negative from stable in line with the negative outlook on the sovereign.