For the second time in four months ratings agency S&P has downgraded Saudi Arabia's debt rating.

On Wednesday S&P cut its rating on Saudi Arabia's debt to 'A-/A-2' from 'A+/A-1.'

On October 30, S&P cut Saudi Arabia's rating to 'A+/A-1' from 'AA-/A-1+.'

A debt downgrade makes it more expensive for sovereign issuers to borrow money.

In a release on Wednesday, S&P said Tuesday's announcement that Saudi Arabia, Russia, Venezuela, and Qatar would freeze production won't impact the firm's assumptions that oil prices will average $40 a barrel in 2016, and thus do little to improve Saudi Arabia's fiscal standing.

S&P notes that Saudi Arabia is currently prepared for a deficit of 13% in 2016, but the firm believes the kingdom's budget assumptions are based on oil trading at $45 a barrel.

But as other analysts noted Tuesday, the first move out of Saudi Arabia to combat the decline in oil prices has fallen on deaf ears both in the market and the analyst community.

"The first market reaction to this news was a further decline in oil prices," S&P wrote Wednesday.

The firm added:

"On the supply side, we note that the freeze would take place at already record high levels of output for Russia and Saudi Arabia. In addition, we understand the agreement is conditional on other producers also freezing production. We view such a change in policy direction as unlikely in Iran and Iraq. On the demand side, we see China's economic slowdown and debt load as a continuing top global risk."

In a note Tuesday, Helima Croft at RBC Capital Markets said that this announcement from Saudi Arabia, while perhaps doing little to change market dynamics right now, puts the ball back in Iran's court.

Croft called this taking a page from the "Frank Underwood playbook," referencing the main character from Netflix's hit series "House of Cards."

As Croft wrote:

If the Iranians and Iraqis refuse to get on board with this production freeze, they will likely bear the brunt of cartel criticism for failing to protect the fiscal position of all the members. Today's announced production freeze really carries few political or economic costs for Saudi Arabia, but for Iran, the political and economic calculations are much more complicated.

S&P is set to publish another opinion on Saudi Arabia on April 8.

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