Analysts from Brown Brother Harriman, took note of recent moves by rating agencies. According to them the deterioration could continue if commodity prices don’t recover. Key Quotes: “The ongoing deterioration in credit quality of the Emerging and Frontier Markets largely reflects the negative impact from slower global growth and falling commodity prices.” “Whether or not we see continued downward pressure on sovereign ratings in 2016 will depend in part on how commodity prices behave going forward.” “The recent stabilization in oil prices came too late to prevent downgrades yesterday to some major oil producers. S&P downgraded Kazakhstan (BBB to BBB-), Saudi Arabia (A+ to A-), Oman (BBB+ to BBB-), Bahrain (BBB- to BB), and Brazil (BB+ to BB).” “As such, we agreed with the downgrades to Kazakhstan (another downgrade likely), Bahrain (now correctly rated), and Brazil (another downgrade likely). However, we disagreed with the downgrades to Saudi Arabia and Oman.” “These moves came days after S&P cut the outlook on Colombia’s BBB rating from stable to negative. We were very surprised by this move, and disagree with it. “ “We see several other commodity exporting countries that face downgrade risks. These include Malaysia (implied rating of BBB vs. A- actual), Chile (implied rating of A- vs. AA- actual), and South Africa (implied rating of BB vs. BBB- actual).” For more information, read our latest forex news.