Global Investment House rating action

The issues impacted by this action are as follows:
A Negative Outlook has been applied pending clarification of Global's ability to meet its ongoing financial obligations.

With no retail deposit base, Global's access to wholesale funding has been adversely impacted by the tight liquidity position in global markets which is now starting to affect the GCC region.

Despite a very significant increase in equity resulting from a share issue earlier in the year ($1.15bn GDR issue and KWD37m private placement) and the disposal of its 14.7% investment in Bank of Bahrain and Kuwait for KWD43.6m ($158m), Global nonetheless recently defaulted on its obligations under a $200m syndicated loan. Information on the extent to which Global has further assets that could be liquidated to meet funding obligations is not available at the present time.

CI understands that negotiations are scheduled to take place with the syndication members as well as other lending Institutions over the coming days with a view to restructuring Global's short and medium term debt within a $1bn+ facility, thus putting its funding on a more stable footing. Whilst official support for Global - either directly or in the form of guarantees to lenders - cannot be discounted, it is not possible to ascertain at the present time whether or not this will be forthcoming.

CI expects to issue further rating announcements as additional information on Global's liquidity position becomes available.