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PRESS RELEASE: Fitch Assigns Upcoming Bahrain USD Bond 'BBB'(exp) Rating

Wednesday, Jun 13, 2012

The following is a press release from Fitch Ratings:

Fitch Ratings-London-13 June 2012: Fitch Ratings has assigned the Kingdom of Bahrain's forthcoming US dollar bond a 'BBB'(exp) rating.

The expected rating is in line with Bahrain's foreign currency Issuer Default Rating (IDR) of 'BBB'/Stable. The rating was affirmed on 3 August 2011.

Bahrain's economic growth in 2011 was weighed down by political unrest during the first half of the year affecting the banking sector and tourism, although high oil prices and increased production helped sustain the economy, with real GDP growth of around 2% registered for 2011.

The weaker macroeconomic backdrop and increased social spending increased pressure on public finances, with public debt to GDP rising to 36.4% in 2011, from around 16.4% in 2008, but in line with the 'BBB' median of around 39% for the same period. Forthcoming support from Saudi Arabia and other Gulf Co-Operation Council (GCC) countries is expected to offset further rises in social spending, helping to support Bahrain's credit rating.

As a net external creditor to the tune of 60% of GDP in 2011, Bahrain's external sector continues to be one of its main credit strengths. The current account continues to be in surplus, officially estimated at 12.5% of GDP in 2011.

Fitch has previously stated that a worsening in the security situation and protracted delays in the political reform process would result in renewed downward pressure on the rating. By contrast, genuine political reform would lead to a sustainable improvement in Bahrain's political environment, with positive consequences for the fiscal and economic outlook and the rating.

Contact:

Primary Analyst

- Maria Malas-Mroueh

- Director

- +44 (0) 20 3530 1081

- Fitch Ratings Limited

- 30 North Colonnade

- London E14 5GN

Secondary Analyst

- Charles Seville

- Director

- +44 (0) 20 3530 1048

Committee Chairperson

- Richard Fox

- Senior Director

- +44 20 3530 1444

Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com.

Additional information is available at www.fitchratings.com.

The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Sovereign Rating Methodology', dated 15 August 2011 are available at www.fitchratings.com.

Applicable Criteria and Related Research:

- Sovereign Rating Methodology

- http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648978

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

(END) Dow Jones Newswires

13-06-12 1050GMT

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