Egypt avoids Moody's rating downgrade

Egypt has avoided a possible ratings downgrade by Moody's Investors Service after being on review for almost nine months, with the ratings firm Wednesday citing progress made towards a political transition to civilian rule and reduced political uncertainty for its decision to stay pat.

Moody's confirmed Egypt's B2 government bond ratings and maintained its outlook at negative. The review for possible downgrade was started on Dec. 21 and extended on Apr. 26, it said in an emailed statement.

The ratings firm also said a better external payments position, progress towards stabilizing government financing and macroeconomic conditions, and the formal request made by the new Egyptian government for International Monetary Fund support was behind its decision.

"These developments have to an appreciable extent calmed the unsettled political conditions and have shored up weak investor confidence that followed the January 2011 revolution, the subsequent overthrow of President Hosni Mubarak's government and the series of transitional governments, all of which had in turn prompted Moody's to downgrade Egypt's sovereign rating and to keep it on review for further possible downgrade," Moody's said.