Kuwait Times

Published Date: October 16, 2007

KUWAIT: Standard & Poor's Ratings Services said yesterday that it had raised its long-term corporate credit rating on Kuwait-based operating holding company Kuwait Projects Co (Holding) KSC (KIPCO) to 'BBB+' from 'BBB-', and its short-term corporate credit rating to 'A-2' from 'A-3'. The outlook is stable.

The rating action reflects steady improvements in KIPCO's financial, and to some extent, its portfolio risk profile, which are supported by a commitment to lower gearing," said Standard & Poor's credit analyst Andreas Kindahl.

The ratings include a one-notch uplift to reflect implicit support from members of Kuwait's ruling Al-Sabah family, who own 45 percent of the share capital in KIPCO. The ratings primarily reflect the financial flexibility offered by KIPCO's sizeable portfolio of listed equity investments and the quality of its investments (primarily bank and insurance companies).

They are constrained by the concentration of the group's investments in Gulf Cooperation Council countries and the Kuwaiti financial sector, as well as reduced portfolio liquidity owing to its focus on controlling stakes in its holdings. At June 30, 2007 KIPCO had net debt of $284 million. KIPCO is controlled by Al-Futtooh Investment, which is connected to the Al-Sabah family and has been supportive of KIPCO in the past.

The stable outlook primarily reflects our expectations that KIPCO will maintain sufficient balance sheet flexibility. We also expect that KIPCO will be very careful and prudent in its investment selection process, to maintain investment portfolio quality. - Reuters