S&P is the second major US agency to cut Israel's long-term credit rating, citing conflict

S&P is the second major US agency to cut Israel's long-term credit rating, citing conflict

Due to the long-term deterioration, Israel's credit rating has changed from having a very good ability to satisfy financial obligations to having a strong ability to do so.

Shortly before the Iranian hit, S&P reduced Israel's credit rating; this came almost three months after Moody's, another major U.S. credit agency, cut Israel's rating because of the country's prolonged military war with Hamas.

S&P has lowered Israel's long-term credit rating, citing the possibility of a military confrontation with Iran. In doing so, it is the second significant U.S. credit rating agency.

A significant air base and a nuclear facility close to the Iranian capital, Isfahan, were the target of an alleged drone strike early on Friday. This incident is believed to be part of Israel's reprisal for Tehran's historic drone and missile attack on the nation a few days before.

Shortly before the Iranian hit, and almost three months after Moody's, another major U.S. credit agency, lowered Israel's rating because of the country's prolonged armed war with Hamas, S&P announced its downgrading.

S&P Global Ratings downgraded Israel's foreign and local currency sovereign credit ratings from A- to A+ over the long term, and from A-1+ to A-1 over the short term.

Israel's credit rating has decreased from a very strong ability to fulfill financial obligations to a strong capacity to meet financial commitments, but relatively sensitive to unfavorable economic conditions and changes in circumstances, as a result of the long-term downgrading, according to S&P.

The credit rating agency said, "In our opinion, the recent escalation of hostilities with Iran exacerbates already elevated geopolitical risks for Israel." We hope that a more extensive regional battle will not break out, but it seems like the fight between Israel and Hamas and the struggle with Hezbollah will go until 2024—as opposed to our earlier prediction that armed action would end after six months.

Regarding Israel's long-term ratings, S&P has a negative view.

S&P normally assigns sovereign credit ratings on prearranged dates, although it sometimes deviates from this policy when circumstances warrant it. On May 10, as initially planned, S&P's will release another ratings evaluation for the nation.

The Israeli military declined to comment when contacted, and no Iranian official explicitly confirmed that Israel may have struck. But since Israel's attack on Saturday, amid its own attacks against Iran in Syria and its own conflict with Hamas in the Gaza Strip, emotions have been high.