A rating agency cuts Bahrain again
The test Between 1 Nov 2026 and 31 Oct 2027, Moody's, S&P or Fitch lowers Bahrain's long-term foreign-currency sovereign rating by one notch or more.
Not under way · Confidence: medium · Reviewed 1 Nov 2026 · Scores from 1 to 10
This page answers: What could happen, how it is scored, and who is exposed?
Using this page
- Read the two scores: Likelihood and Impact are kept apart.
- Check what is happening, each fact with its source.
- Use the calendar for the dates to watch.
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Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.
Two separate scales from 1 to 10. Strature never multiplies or merges them.
Why it matters
Bahrain was cut by S&P in November 2025 and by Fitch in February 2026, before the war began. In April Moody's kept its B2 rating but turned the outlook negative, citing the war's hit to oil and aluminium exports that cannot easily be rerouted. Fitch sees debt above 150% of GDP by 2027; Gulf neighbours' help is the main brake.
Why Likelihood 5 Pushes: Fitch's debt path; thin reserves; Moody's war reasons. Brakes: UAE swap; 2018 Gulf rescue; a ceasefire. 5.
Why Impact 4 Threshold case: one notch from one agency.
The other facts on file (6)
- S&P downgraded Bahrain in November 2025 (level not in the source) [2] (25 Feb 2026)
- Fitch cut Bahrain to B on 23 Feb; projects a deficit of 9.2% of GDP and debt above 150% of GDP by 2027 [2] (25 Feb 2026)
- Moody's affirmed B2 and moved the outlook to negative over war fallout on exports and tourism [1] (18 Apr 2026)
- Growth forecast cut to 1.3% from 3.1% (World Bank) [1] (18 Apr 2026)
- Foreign reserves about US$2.9bn at end-January, some two months of non-oil imports [3] (8 Apr 2026)
- UAE-Bahrain central bank currency swap of AED20bn (about US$5.44bn), five years [4] (10 Apr 2026)
Where it sits
Where this risk sits
Size shows Impact. Colour shows the Likelihood band. The two scores are never combined.
- Low 1–3
- Elevated 4–6
- High 7–8
- Severe 9–10
- Bigger circle: higher Impact
- Solid ring: under way
- Red ring: highest Impact on this map
- Where it starts
- Who it reaches
The risk on this map
- A rating agency cuts Bahrain againImpact 4 of 10, Elevated. Likelihood 5 of 10, Elevated. · Bahrain
How it spreads
Between 1 Nov 2026 and 31 Oct 2027, Moody's, S&P or Fitch lowers Bahrain's long-term foreign-currency sovereign rating by one notch or more.
Not under wayChannels 3 on the card
- CanadaNo Canadian loss sourced.
- Borrowing costsA cut raises the cost of Bahrain's market debt and deepens reliance on Gulf neighbours (Strature's view).
- Gulf banksLenders holding Bahraini paper see it repriced (Strature's view).
Sectors 1
- Banks and insurers
Straits 1
Countries 4
Who is exposed
- Countries
- Bahrain, Saudi Arabia, United Arab Emirates, Kuwait
- Sectors
- Banks and insurers
Three scenarios and their signposts
- S1
Holding pattern
Gulf support and a ceasefire hold ratings.
- S2
One more notch
A second Gulf flare or a missing package brings a cut.
- S3
Rescue first
A large GCC package comes before any cut.
| Path | Signpost |
|---|---|
| S1 | Moody's returns the outlook to stable |
| S2 | A new Hormuz closure |
| S3 | A Saudi or GCC deposit announced |
No probability is given for the three paths.
Dates to watch
The dates to watch
A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.
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The other side
Moody's said Bahrain could be upgraded if the conflict ends and oil and aluminium exports resume without lasting damage [1].
Connected in Strature
- Was the Strait of Hormuz closed, or repriced cargo by cargo?
- Strait of Hormuz
- Bahrain
- Saudi Arabia
- United Arab Emirates
- Kuwait
- The Strait of Hormuz shuts again Driven by: A second closure is the export shock Moody's names.
- No new GCC support package for Bahrain by mid-2027 Shares a channel: A missing Gulf package is the main way the rating falls.
Sources
4 sources, numbered as the text cites them
- Moody's changes Bahrain and Iraq's outlook to negative over war fallout. The National · 18 Apr 2026 · News · confidence medium · retrieved 1 Nov 2026
- Bahrain hit by another credit downgrade. Semafor · 25 Feb 2026 · News · confidence medium · retrieved 1 Nov 2026
- Losing Hormuz: The Costs of War for Gulf Oil Exporters (Krane and Alexander). Baker Institute · 8 Apr 2026 · Think tank · confidence medium · retrieved 1 Nov 2026
- UAE and Bahrain sign US$5.44bn currency swap. GCC Business Watch · 10 Apr 2026 · News · confidence medium · retrieved 1 Nov 2026
Reviewed 1 Nov 2026 · version 1 · last change: first review · All risks