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RNS Number : 0168X Kuwait Projects Company Sukuk Ltd 15 December 2023
Kuwait Projects Company Sukuk Limited
Rating action by Moody's Investors Service (Moody's)
Kuwait Projects Company (Holding) K.S.C.P. (KIPCO), the Obligor of Kuwait
Projects Company Sukuk Limited, announced that Moody's has downgraded its
Corporate Family Rating (CFR) to Ba3 from Ba2 and the Probability of Default
Rating (PDR) to Ba3-PD from Ba2-PD. Concurrently, Moody's downgraded to (P)Ba3
from (P)Ba2 the provisional ratings assigned to the senior unsecured $3
billion Euro Medium Term Note (EMTN) program issued by Kuwait Projects Co SPC
Limited and to Ba3 from Ba2 the ratings on the backed senior unsecured bonds
due in 2026 and 2027 issued by Kuwait Projects Co SPC Limited. Moody's also
affirmed Kuwait Projects Co SPC Limited's (P)NP backed short term rating. The
outlook on all ratings remains negative. Rating action reflects Moody's
expectation that KIPCO's market value leverage (MVL) will remain above 40%,
which is higher than what the rating agency originally anticipated.
KIPCO's Ba3 CFR continues to reflect (1) the portfolio of companies' strong
market positions in the financial services and chemicals industries within the
MENA region; (2) the historical track record of maintaining a strong liquidity
profile with the expectation of around $500 million in cash at holding level
as of December 2023 and the propensity to actively prefund debt maturities to
remove refinancing risk; (3) pro-active steps being taken by the KIPCO's
management to strengthen operating and financial performance of major
holdings; and (4) shareholder linkages with Kuwait's ruling family.
The ratings also capture (1) the high asset concentration with KIPCO's three
largest holdings making up close to 50% of KIPCO's investment portfolio value
(excluding cash); (2) capital reinvestment strategy within its subsidiaries
which results in low dividends up streamed and the expectation of a low FFO
interest coverage ratio at holdco level as of December 2023; and (3) the
geographical concentration in MENA, that has areas of heightened geopolitical
and macroeconomic risks.
For further information, please contact:
Investors, Press and Media:
Eman Al-Awadhi
49(th) Floor
KIPCO Tower, Khaled Bin Al-Waleed St, Sharq
P.O. Box 23982
Safat 13100
Kuwait
Tel: +965 2294 3416
Email: eman.alawadhi@kipco.com
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