• Moody’s Rating reaffirms APICORP’s high capital adequacy, supported by a track record of strong profitability and robust asset quality.
• APICORP has a well-diversified funding structure and high shareholder support derived from large callable capital buffers and a robust enforcement mechanism.
Saudi Arabia, August 14 2023 - The Arab Petroleum Investments Corporation (APICORP), an energy-focused multilateral financial institution, announced that Moody's Investors Service (Moody's) had reaffirmed its credit rating as a Long-Term Issuer at 'Aa2' with a Stable outlook.
The ratings reflect APICORP’s ample liquidity to cover upcoming net cash due to its well-diversified funding structure and shareholder support from callable capital, and strong enforcement measures.
Despite credit challenges, including the geopolitical environment in borrower countries and high portfolio and shareholder risks arising from the global carbon transition, APICORP's asset quality remains unaffected thanks to its strong corporate governance and risk management practices.
In addition to a strong capital position supported by its robust profitability, Moody's rating reflects APICORP's return on equity, which averaged 5.6%, three percentage above the median, amid challenging operating conditions. The average return on assets was 1.8% in 2022, in line with the corporation’s 10-year average (2013-2022), above its peers' averages.
Commenting on this development, Mehdi Z. Rizvi, Acting Chief Risk Officer & Head of Credit Risk at APICORP, said: “We are proud that Moody’s has reaffirmed our ‘Aa2’ rating. This is a testament to our strong governance and risk management and is reinforced by the confidence of our partners and other stakeholders in our ability to overcome challenges and seize opportunities as they arise. In line with our strategy, we are committed to transforming our current credit-negative exposure to the global carbon transition into a credit-positive exposure by potentially expanding our portfolio in carbon-reducing sectors over time.”
In addition to Moody's ‘Aa2’ rating, APICORP also holds ratings of ‘AA’ and ‘AA-’ from Fitch and S&P Global, respectively, demonstrating APICORP’s solid financial footing.