Fitch Ratings assigns APICORP long-term IDR of ‘AA’ with stable outlook

According to Fitch, APICORP’s Long-Term IDR of ‘AA’ is based on excellent capitalization with a low risk profile, and strong liquidity assessment with a ‘medium risk’ business environment.

Stable outlook a reflection that APICORP's credit profile is resilient to negative pressures stemming from the COVID-19 pandemic and oil price shock; Key drivers of the rating include APICORP's intrinsic credit features, excellent capitalization, low-risk profile, the high credit quality of its borrowers and strong risk management practices; Fitch assesses APICORP's access to capital markets and alternative sources of liquidity as 'strong; This second rating makes APICORP the only financial institution in the MENA region rated 'AA' by Fitch and 'Aa2' by Moody's

The Arab Petroleum Investments Corporation (APICORP) (APICORP.org), a multilateral development financial institution, today announced that Fitch Ratings assigned it a Long-Term Issuer Default Rating (IDR) of 'AA' with a Stable Outlook.

According to Fitch, APICORP's Long-Term IDR of 'AA' is based on excellent capitalization with a low-risk profile, and strong liquidity assessment with a 'medium risk' business environment. The Stable Outlook reflects Fitch's view that "APICORP's credit profile is resilient to negative pressures stemming from the COVID-19 pandemic and oil price shock."

Furthermore, Fitch affirmed that APICORP, as a commercially focused MDB with an above-peer level of internal capital generation, has been profitable in almost every year since its inception. This is, in Fitch's view, due to very limited credit losses, as evidenced by the high credit quality of its borrowers and 'very low' NPL [non-performing loans], as well as the strong performance of the equity portfolio.

Dr Ahmed Ali Attiga, CEO of APICORP, said: "We are pleased that the new rating from Fitch reaffirms APICORP's robust and healthy financial profile, underpinned by a sustainable business model that continues to drive value and growth. This is a testament of APICORP's ability to execute its important public mandate in the strategic and vital energy sector within our Member Countries, and beyond. Moreover, we are delighted with the recognition of our strong and prudent governance and risk management frameworks, policies, and tools, which alongside our strong business origination and management, ensure APICORP's overall resilience, despite the COVID-19 pandemic and oil price fluctuations."

Notably, Moody's Investor Service reaffirmed APICORP's credit rating of 'Aa2' with a 'Stable' outlook, in April this year, reflecting its strong financial fundamentals, despite current economic and market shocks.

This second rating makes APICORP the only financial institution in the MENA region rated 'AA' by Fitch and 'Aa2' by Moody's.

APICORP also posted strong financial results for the year ended 2019, including a 17% Y-O-Y increase in net recurring income to USD112 million, up from USD96 million at year-end 2018. Moreover, APICORP's General Assembly ratified a landmark callable capital increase to USD8.5 bn, in April 2020, demonstrating strong shareholder support and long-term commitment.

(With Inputs from APO)