Moody’s downgrades Qtel’s ratings 

(MENAFN - The Peninsula) Qatar Telecom QSC (Qtel) announced that Moodys Investor Service following its review has reduced its A1 rating for Qtel, Qtel International Finance Limited, a wholly owned subsidiary of Qtel, to A2 and its A1 rating for the bonds issued under Qtels GMTN programme to A2. Moodys Outlook for Qtel is stable.

On the other hand in July 2010, Qtels corporate credit ratings by Standard & Poors Ratings Services (S&P) were increased from A long term to A and from A-2 short term to A-1. The upward revision followed S&Ps upgrade of the sovereign ratings on the State of Qatar. Fitch Ratings reassigned an issuer default rating of A in early 2010.

Qtel expects no material impact from the Moodys rating change as the solid company performance has been acknowledged by the rating agency. The one notch downgrade mainly results from Moodys change in assumptions and methodology regarding government support in line with other Government Related Issuers. This follows similar rating actions for other GRIs in the GCC region after the debt restructuring announcement of Dubai Holding in late 2009.

Moodys considers government support of Qtel to still be high but Qtel does not benefit from an explicit guarantee of the Qatari government or a special legal status. However, Moodys continues to assume government support to be high and underpinned by interventionist government policies in support of the economy and a track record of government bail-outs, in recent years most visible for the local banking system.