Moody's, on 3 June, announced in a statement that it was 'withdrawing Iran's sovereign ratings because of US government concerns that such ratings could be inconsistent with US sanctions on Iran. These concerns have been raised despite the fact that Moody's has no commercial relationship with Iran and has received no compensation for the ratings. Moody's has responded to the US government's concerns and, if those concerns can be satisfied, would anticipate issuing updated ratings.'

Moody's officials say that they hope to satisfy the 'concerns' of the US government and have the unsolicited ratings for Iran reinstated as soon as possible. Moody's had opened its sovereign coverage of Iran with a B2 rating: a sub-investment grade rating on a par with its rating of Lebanon (MEED 17:5:02).

The decision by Moody's to withdraw its rating is not expected to hinder Iran's pending Eurobond debut. 'We are continuing to work as before and have no reason to think that anything has changed,' says one of the bankers working on the Eurobond. 'We are in the documentation phase at the moment and are going along with the Iranians. The issue could be staged before or after the summer, it's hard to tell. There are still some things to be sorted out and Iran is a first-time borrower.' Bank Markazi (central bank) appointed BNP Paribasand Commerzbankas joint leader arrangers for the issue in late May (MEED 31:5:02, Banking & Finance). The debut bond is expected to have a minimum size of Eur 300 million ($279 million).

London-based FitchRatingsis the only other institution to offer ratings coverage of Iran: it issued a B+ sub-investment grade rating on 10 May. 'We are continuing our coverage of Iran,' says a Fitch official. 'The rating is issued out of our London office, no US nationals were involved in preparing it and our New York office was not involved. We have not contravened any sanctions regime.'