2025-10-31
Moody’s Assigns ‘(P)Aa2′ Rating and Stable Outlook to Qatar’s Global Sukuk Ventures Issuance
Global rating agency Moody's has assigned ‘(P)Aa2’ rating and "stable" outlook to Qatar's Global Sukuk Ventures’ issuance programme.
The rating agency assigned a foreign-currency backed senior unsecured MTN (medium-term note) rating of ‘(P)Aa2’ to the trust certificate issuance programme of Global Sukuk Ventures, a special purpose vehicle (SPV) incorporated in Qatar and wholly owned by the government of Qatar.
The trust certificates issued by the SPV will constitute direct, unconditional and unsubordinated obligations of the sovereign, which will rank pari passu with all current and future senior unsecured external debt of the Government of Qatar.
The proceeds of the issuances are intended for general budget purposes. Proceeds from any green instrument issuances are intended to finance new or refinance existing projects eligible under the government's green financing framework.
The rating mirrors the government of Qatar's Aa2 long-term issuer rating and stable outlook.
"We note that our sukuk ratings do not express an opinion on the structures' compliance with Shariah Law," Moody's said.
Qatar's Aa2 ratings are supported by its vast hydrocarbon reserves, exceptionally high per-capita income and the government's very strong balance sheet.
These strengths provide significant shock-absorption capacity and mitigate the sovereign's high economic and fiscal exposure to declines in hydrocarbon demand and prices, longer-term risks related to global carbon transition, and risks arising from regional geopolitical tensions, the rating agency said.
Highlighting that the stable outlook reflects a balance of risks at the current rating level; Moody's said a scenario where hydrocarbon demand and prices decline significantly and durably, "potentially as a result of a more rapid global carbon transition than we currently expect, would result in a material fiscal deterioration."
On the other hand, potentially faster and more significant progress on economic and fiscal diversification poses an upside risk to the credit profile.
"Longer-term risks related to carbon transition are also mitigated by Qatar's track record of policy effectiveness and access to ample financial buffers that the government can use to accelerate and sustain economic diversification," it said.
Furthermore, demand for Qatar's hydrocarbon export mix, which is dominated by LNG (liquefied natural gas), is likely to peak considerably later than demand for other fossil fuels, allowing the sovereign more time to adjust, including by broadening its government revenue base.
Near-term risks related to elevated regional geopolitical tensions are balanced by the government's very large stock of financial assets, which are available to buffer temporary declines in exports and government revenue even in a very low-probability scenario where maritime traffic through the Strait of Hormuz is disrupted due to an escalating regional conflict, according to Moody's.
The rating agency assigned a foreign-currency backed senior unsecured MTN (medium-term note) rating of ‘(P)Aa2’ to the trust certificate issuance programme of Global Sukuk Ventures, a special purpose vehicle (SPV) incorporated in Qatar and wholly owned by the government of Qatar.
The trust certificates issued by the SPV will constitute direct, unconditional and unsubordinated obligations of the sovereign, which will rank pari passu with all current and future senior unsecured external debt of the Government of Qatar.
The proceeds of the issuances are intended for general budget purposes. Proceeds from any green instrument issuances are intended to finance new or refinance existing projects eligible under the government's green financing framework.
The rating mirrors the government of Qatar's Aa2 long-term issuer rating and stable outlook.
"We note that our sukuk ratings do not express an opinion on the structures' compliance with Shariah Law," Moody's said.
Qatar's Aa2 ratings are supported by its vast hydrocarbon reserves, exceptionally high per-capita income and the government's very strong balance sheet.
These strengths provide significant shock-absorption capacity and mitigate the sovereign's high economic and fiscal exposure to declines in hydrocarbon demand and prices, longer-term risks related to global carbon transition, and risks arising from regional geopolitical tensions, the rating agency said.
Highlighting that the stable outlook reflects a balance of risks at the current rating level; Moody's said a scenario where hydrocarbon demand and prices decline significantly and durably, "potentially as a result of a more rapid global carbon transition than we currently expect, would result in a material fiscal deterioration."
On the other hand, potentially faster and more significant progress on economic and fiscal diversification poses an upside risk to the credit profile.
"Longer-term risks related to carbon transition are also mitigated by Qatar's track record of policy effectiveness and access to ample financial buffers that the government can use to accelerate and sustain economic diversification," it said.
Furthermore, demand for Qatar's hydrocarbon export mix, which is dominated by LNG (liquefied natural gas), is likely to peak considerably later than demand for other fossil fuels, allowing the sovereign more time to adjust, including by broadening its government revenue base.
Near-term risks related to elevated regional geopolitical tensions are balanced by the government's very large stock of financial assets, which are available to buffer temporary declines in exports and government revenue even in a very low-probability scenario where maritime traffic through the Strait of Hormuz is disrupted due to an escalating regional conflict, according to Moody's.
Source: GULF TIMES