Dammam, Kingdom of Saudi Arabia – 04 October, 2015: New analysis published by Moody’s Investors Service considers the credit ratings outlook for the Arab Petroleum Investments Corporation (APICORP) to be “stable”.
The research states that APICORP’s “Aa3 long-term and Prime-1 short-term debt ratings balance strong capital adequacy, a high-quality investment asset portfolio, de facto preferred creditor status and strong shareholder support against high geographic and sector concentration relative to peers.”
APICORP’s strong capital adequacy, which is well above regulatory requirements, relatively low leverage, solid track record of profitability, and its increasingly diverse equity investments, all contribute to Moody’s view on the company’s “high intrinsic financial strength”.
Commenting, Dr Aabed Al Al-Saadoun, Chairman of the board of APICORP, which is wholly owned by the 10 member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC), said:
“This positive credit opinion from Moody’s, which offers a deeper insight into the rationale behind APICORP’s existing high quality and low risk long and short term credit ratings, is testament to the steps we are taking to deliver against our mandate and business strategy.”
“Despite being a multilateral development bank, we are commercially minded in approach and eager to build on a successful 40 year track record as a partner of choice for the Arab energy industry. We are making increased equity investments to better balance our risk profile, and APICORP’s overall performance and profitability continue to impress.”
Moody’s categorises APICORP as a supranational multilateral development bank. Therefore, its ratings are based on three main factors: capital adequacy, liquidity and strength of member support. For multilateral development banks, the first two factors combine to form the assessment of Intrinsic Financial Strength, which provides a preliminary rating range. The strength of member support can provide uplift to the preliminary rating range.