In a strong validation of its increasingly robust fundamentals, Arab Petroleum Investments Corporation (APICORP), the Multilateral Development Bank of the Organisation of Arab Petroleum Exporting Countries (OAPEC) today announced that Moody’s has upgraded its issuer and senior unsecured rating from A1 to Aa3, while maintaining a stable outlook. The government of Qatar owns a 10% stake in APICORP.
The substantial jump in APICORP’s ratings reflects the continual reinforcement of the Multilateral Development Bank’s fiscal strengths over the last two years. One of the drivers of the rating upgrade, Moody’s said, was the introduction of $750 million callable capital by its shareholder countries at its General Assembly meeting in May 2011, during which APICORP’s shareholders also unanimously decided to double its authorized capital from US$ 1.2 billion to US$ 2.4 billion, and to increase its paid-up capital from US$ 550 Million to US$ 750 Million.
Ahmad Bin Hamad Al Nuaimi, CEO, APICORP said: “We are delighted by this new ratings achievement, which will further boost our strategic equity and financing programme aimed at supporting the Arab energy industry’s development. The steadfast support of APICORP’s shareholding countries has played a significant role in this ratings achievement, which in turn is a reflection of their confidence in our ability to fulfill our mandate of contributing to the Arab energy industry’s transformation. In addition to the invaluable support of our shareholders, the expansion of our medium term committed funding has has also played a key role in strengthening our capital base.”
Moody’s also stated that APICORP’s capital adequacy position relative to its MDB peers has increased significantly. Its risk-asset coverage ratio improved from 210.5% in 2010 to 367.0% in 2011, a position that is stronger than the median of Aaa-rated companies. Furthermore, APICORP has improved the composition of its funding since 2005 with a medium-term bond issuance and other term financing facilities; as well as more stable deposits from partner companies.
“Considering the current challenging economic and banking environment where substantial credit upgrades for financial institutions are rare, we believe the Aa3 rating upgrade APICORP has received is exceptional. The new rating will have a very positive impact on our ability to forge new partnerships with financial institutions and the Arab and international energy industry,” said Al Nuaimi.
Over 2012, APICORP stepped up its efforts to support Arab energy industry development through a series of initiatives. Since the beginning of the year, APICORP has committed approximately half a billion dollars in project and trade finance opportunities, and has also commenced a collaboration with J.P. Morgan to expand APICORP’s energy trade finance services to the Arab World and beyond. In the first quarter of 2012, APICORP also successfully concluded its first ever SAR 2.5 Billion (US$ 667 million) Shari’ah Compliant term loan facility, which was oversubscribed by leading Saudi banks.
Since its founding in 1975, APICORP has played a vital role in fostering the development of the Arab energy industry. Over the last 36 years, APICORP has invested, as an equity owner, in a total of 22 oil and gas joint venture projects worth in excess of $16 billion. At the same time, APICORP has participated in direct and syndicated energy finance transactions worth in excess of US$130 billion. APICORP‘s aggregate commitments in these transactions, both in equity and debt, are valued in excess of US$11 billion.
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