Kuwait-based Arab Investment and Export Credit Guarantee Corp. rated 'AA-'; outlook stable

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'The ratings on AIECGC reflect its very strong capitalization, strong financial flexibility derived from its status as a supranational entity, and strong liquidity,' said Standard & Poor's credit analyst Kevin Willis. 'A constraint on the rating is the undeveloped nature of the credit insurance markets in the region,' he added. AIECGC's key objective is to promote the flow of Arab investments among member countries and Arab exports worldwide.

'We expect that AIECGC will continue to be very strongly capitalized as business volume increases, as it meets its primary goal of servicing regional economic growth,' said Mr. Willis. It will continue to benefit from shareholder support. Although not a key rating driver, adequate profitability will be used to support the expansion. Liquidity will continue to be strong, but will diminish in absolute terms as volume rises.

A negative rating action could follow any wavering of shareholder support in terms of either capital raising, provision of liquidity, or loss recoveries, resulting in a material weakening of capital adequacy or liquidity.

A positive rating action is unlikely in the medium term.