International rating agency Moody's has withdrawn its sovereign credit ratings for Iran after pressure from the US Government.

The lack of a rating from Moody's is not likely to have a material impact

Stephen Taran Salomon Smith Barney

President George W Bush has claimed Iran is part of an "axis of evil" and has continued to economic impose sanctions.

Moody's said it eliminated its rating because it could be "inconsistent" with the US sanctions.

"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 said in a statement.

No impact

The move is thought to be unprecedented in the ratings business but unlikely to affect those looking to invest in Iran.

"You are talking about a very small number of European fund managers and commercial banks that would have been interested in the new issue to begin with," said Stephen Taran, head of sovereign credit research at Salomon Smith Barney.

"The commercial banks are primarily driven by a desire to enhance their relationship with the Iranian government. So the lack of a rating from Moody's is not likely to have a material impact."

Kowtowing?

"Moody's has responded to the US Government's concerns and, if those concerns can be satisfied, would anticipate issuing updated ratings," the news release said.

In 1999, Iran received a financial rating from Moody's for the first time since the Islamic revolution of 1979, and in 2000, was upgraded from "stable" to "positive".

Oil-rich Iran had been preparing to tap the capital markets for the first time since the 1979 Islamic revolution.

Two European banks, BNP Paribas and Commerzbank, had said Iran had hired them to sell between 300m and 500m euros of debt.

Moody's had rated Iran's foreign currency debt at junk bond levels, or as a very risky investments.