- Key drivers include strong capital adequacy, high asset quality and strong asset performance
- APICORP’s strong liquidity and diversified funding structure have enhanced its financial standing
- APICORP’s resilience in challenging operating environment underpinned by portfolio diversification and strong quality of management
Dammam, Saudi Arabia, November 10, 2020: The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, announced that its credit rating has been affirmed by Moody’s Investors Service at ‘Aa2’ with a stable outlook for 2020, reflecting the Corporation’s strong capital adequacy, robust asset quality, and strong asset performance.
Improvement in APICORP’s liquidity and funding profile
According to Moody’s, APICORP’s liquidity and funding profile improved substantially in recent years, highlighted by a reduced reliance on short-term deposits for funding and an increased presence in the international debt markets. Shareholders’ willingness to support the Corporation given its strategic mandate for the 10 Arab oil exporting countries that make up its Member States, is another credit strength, as indicated most recently by the Corporation’s largest ever increase in callable capital in April 2020.
APICORP’s established resilience framework to navigate challenges in the region
The Moody’s assessment on APICORP stated that the stable outlook reflects its view that the risks to the Corporation’s asset performance – which stem primarily from exposure to regional geopolitical tensions, as well as pressures on key borrower countries from the coronavirus crisis and the related oil price decline – are balanced by the Corporation’s established resilience to these risks over the past years, improving development-related asset portfolio diversification, and strong risk management. Looking ahead, Moody’s anticipates the Corporation’s profitability to remain strong in the coming years thereby supporting its capital base.
Dr. Ahmed Ali Attiga, CEO of APICORP, commented: “This achievement is another testament of APICORP’s ability to execute its important development mandate in the energy sector within our Member Countries and wider MENA region while at the same time maintaining robust financial and risk metrics. A key priority for us in the current economic climate, which comes as a result of the unprecedented 2020 health, economic and financial crisis, is to continue our important countercyclical role and drive the transition towards a more sustainable energy future in the post-COVID-19 era. This latest rating announcement from Moody’s propels us further in this key priority in a manner that is financially prudent.”
Notably, Fitch Ratings assigned APICORP a Long-Term Issuer Default Rating (IDR) of ‘AA’ with a stable outlook in June 2020. The combined ratings by Fitch and Moody’s makes APICORP one of few financial institutions in the world rated ‘AA’ by Fitch and ‘Aa2’ by Moody’s.