Global credit ratings agency S&P downgraded Israel's long-term rating from 'A+' to 'A' on Tuesday amid an escalating conflict with the Lebanese group Hezbollah.
The rating agency cited risks to Israel's economy and public finances from the ongoing warfare with Hezbollah and a possible conflict with Iran.
"We now consider that military activity in Gaza and an upsurge in fighting across Israel's northern border -- including a ground incursion into Lebanon -- could persist into 2025, with risks of retaliation against Israel," S&P said.
The agency's decision was originally scheduled for Nov. 8 but was moved up due to the escalating conflict with Hezbollah.
"The unscheduled announcement was due to the significant rise in Israel's geopolitical and security risks," S&P said.
The downgrade came days after Moody's credit rating agency slashed Israel's credit rating by two levels, from 'A2' to 'Baa1,' with a negative outlook.
The decision was issued before Iran fired around 180 ballistic missiles at Israel amid heightened tensions between the two regional arch-rivals.
Iran's Islamic Revolutionary Guard Corps (IRGC) said the attack was in response to the assassinations of Hamas leader Ismail Haniyeh, Hezbollah leader Hassan Nasrallah and IRGC commander Abbas Nilforoshan.
Haniyeh was killed in an attack in Tehran in July, while Nasrallah and Nilforoshan were killed in an airstrike in the Lebanese capital Beirut last week.
Israeli Prime Minister Benjamin Netanyahu said Iran made a "big mistake" with its missile attack and "will pay for it."
The Israeli army has launched a devastating military offensive on the Gaza Strip since a cross-border attack by the Palestinian group Hamas last Oct. 7, killing more than 41,600 people, mostly women and children, and injuring over 96,400 others.
The conflict has spread to Lebanon, with the Israeli army launching massive airstrikes against what it calls Hezbollah targets, killing more than 1,073 people and injuring over 2,950 others since Sept. 23, according to the Lebanese Health Ministry.
The international community has warned that Israeli attacks in Lebanon could escalate the Gaza conflict into a wider regional war.
