Mubasher: Moody's Investors Service on Tuesday affirmed its long-term issuer and senior unsecured MTN rating for Gulf Investment Corporation G.S.C. (GIC) at A2/(P)A2, noting that outlook remains stable.
“The affirmation of the A2 rating balances lower leverage and a continuing strong capital position against the higher risk associated with the GIC's equity investment model, including in illiquid stakes, the corporation's ongoing reliance on wholesale deposits as a source of funding, and the decline, albeit modest, in shareholders' ability to support the institution,” Moody’s stated.
As for the stable outlook, the investors’ service firm said it based its decision on GIC’s robust risk management function which would contribute “to broadly stable credit metrics through potential shocks.”
Moody’s cited GIC’s profitability track record, which it forecast would continue and which points to the corporation's ability to preserve capital.
Moreover, Moody’s confirmed Kuwait-based GIC's short-term issuer rating at P-1, and its (P)A2 senior unsecured MTN programme rating for GIC Funding Limited, a wholly-owned special purpose vehicle under GIC “whose obligations are guaranteed by GIC and rank pari passu with GIC's other unsecured obligations.”
Moody’s also gave GIC Funding Limited a stable outlook.
