Moody's reaffirms Kipco credit ratings of Baa1/P-2

Moody's has changed its outlook on Kipco from stable to negative, however, Kipco remains Moody's highest rated private sector corporate company in the MENA region.

Moody's has also assigned Baa1/Prime-2 with negative outlook ratings to Kipco's $2bn European Medium Term Note (EMTN) programme.

In its report on Kipco, Moody's stated that 'Kipco has responded well to a challenging global and local market environment by strengthening liquidity and actively managing leverage in support of credit metrics.'

Moody's also said that Kipco's leverage - based on its debt-to-market value - 'was 16% at year-end 2008 (19% at 1H 2009), thus comfortably within Moody's 25% ceiling for the rating. Moody's takes comfort from the fact that Kipco has actively managed its market value leverage by selling around $200m of core and non-core assets during turbulent market conditions in support of its credit profile'.

Commenting on the Moody's ratings, Kipco's Vice Chairman, Mr Faisal Al Ayyar, said:

"We are delighted that our status as the region's leading private sector corporate has been reaffirmed. We see this as another sign that the global financial community understands and appreciates our strategy of building and growing businesses to create long-term value, recognises the underlying strengths of our core operating companies and our strong financial position. This has been achieved by our companies maintaining strict financial discipline, a proactive funding policy and continuing our on-going dialogue with investors."

Kipco currently has BBB+/Negative/A2 ratings from Standard & Poor's and an A- rating from Capital Intelligence. Kipco has effective direct holdings in Burgan Bank, Gulf Insurance Company and United Gulf Bank. Burgan Bank has ratings of BBB+/Negative/A-2 from Standard & Poor's and A2/Negative/P-1 from Moody's; Gulf Insurance Company has BBB+/Stable ratings from Standard & Poor's; and United Gulf Bank has Baa3/Negative/P-3 ratings by Moody's.