08/06/2010 – Moody’s A1 Rating Endorses Underlying Strength of APICORP
KSA, 08 June, 2010: Arab Petroleum Investments Corporation (APICORP), a multilateral development bank owned by the ten member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC), announced that it has received a first-time issuer rating of A1 by Moody’s Investors Service for long-term debt and Prime-1 for short-term debt. According to its Chief Executive and General Manager, Mr. Ahmad Bin Hamad Al Nuaimi, “The rating is an important milestone for APICORP and I expect it will assist in the Company’s 2010-2014 five years business plan. It will enhance ongoing operations and facilitate the achievement of our short and long term goals.”
APICORP’s financial solidarity is evident in the fact that despite an unfavorable impact of the financial crisis on credit markets and liquidity, the Corporation managed to be self-sufficient in honoring its obligations. Shareholder governments’ strong commitment, a high-quality asset portfolio, an established track record and de facto preferred creditor status enable APICORP to fulfill its objectives of supporting the development of the oil, gas, petrochemical and energy industries in the Arab world.
“Our risk-weighted capital adequacy ratio was approximately 25 percent at the end of 2009. This is stronger than most A-rated commercial banks and is expected to rise to around 30 percent by 2014,” explained Mr. Al Nuaimi.
The Corporation’s stellar Year-End 2009 financial performance of 112% increase in profits, compared to 2008, is testament to a dynamic operation in a lucrative sector. Total assets by year end 2009 rose by 15% year-on-year to US$ 4.1 billion, while total shareholders’ equity also rose by 23% year-on-year to US$ 1.1 billion.
“The performance of APICORP’s assets is unusually robust compared with other multilateral development banks, with a reported weighted average credit quality equivalent to Aa on Moody’s rating scale,” explains Tristan Cooper, Moody’s Head Analyst for Middle East Sovereigns. Moody’s also notes APICORP’s well-established track record. Since its creation in 1974, APICORP has sustained many regional crises and periods of low oil prices without serious difficulty. “APICORP has never defaulted on any of its obligations,” noted Mr. Cooper.
Mr. Al Nuaimi observed, “APICORP is well positioned for the coming five years in the Arab world. Hydrocarbon and energy assets are expected to outperform others as the global economy recovers. As per our in-house research, of the estimated US$470 billion investments required in the Arab world, the oil supply chain accounts for 47 percent, gas supply chain for 36% and the oil-or-gas-fuelled power and power/water generation sector for the remaining 17%. These are large investments with stable and assured returns that we intend to participate in.”