Standard & Poors may lower Pakistans foreign-currency B+ rating if political instability escalates, following the Thursday assassination of opposition leader Benazir Bhutto, according to a statement issued today. S&P lowered Pakistans rating outlook last month to negative from stable due to President Pervez Musharrafs imposition of emergency law.
The assassination itself will not result in a rating action. However, a further weakening of Pakistans institutions would lead to a rating downgrade, the statement said.
Moodys Investors Service also has a negative outlook on Pakistan, with a B1 rating. Both the S&P and Moodys ratings are four notches below investment grade.