S&P approved for Saudi credit ratings

The Saudi Arabian regulator has granted approval to Standard & Poor’s to provide credit ratings in the country.

It is the first approval from the Capital Market Authority (CMA) since its announcement last year that ratings agencies would need to obtain licences if they were to continue their activities.

“The CMA board of commissioners has issued its resolution authorising Standard and Poor’s Credit Market Services Europe to conduct credit rating activities in the kingdom,” says the authority in a statement.

The regulator’s motive in requiring credit agencies to gain licences may be to standardise the ratings system as part of a move to encourage more corporate bond issuance.

Many Saudi companies rely on bank loans rather than bonds, which some see as a systemic risk.

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