APICORP credit rating affirmed at ‘AA’ by Fitch Ratings; Outlook revised to ‘Positive’

• Outlook revision to positive reinforces APICORP’s position as one of the highest-rated financial institutions in the MENA region 

• The revision of the outlook comes on the strength of APICORP’s ‘steady improvement in key solvency and liquidity metrics’ 

Saudi Arabia, June 22, 2022: The Arab Petroleum Investments Corporation (APICORP), a multilateral financial institution, today announced that Fitch Ratings has revised the outlook on its Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at ‘AA.’ 

The key drivers for the revised outlook according to Fitch’s report reflected “steady improvements in key solvency and liquidity metrics over recent years” and its expectation that this trend will continue. Notably, the report noted APICORP’s usable capital-to-risk-weighted-assets (FRA) ratio of 52% and equity-to-adjusted-assets ratio of 32%, both of which are “well above the ‘excellent’ thresholds of 35% and 25%, respectively.”

Fitch also cited APICORP’s “excellent capitalization and low risk profile,” noting the “high credit quality of its borrowers” and success in maintaining its non-performing loan (NPL) ratio at a “very low level since 2019” — which stood at 0.3% at the end of 2021. It also stated that APICORP has “diversified banking exposures” and that it “markedly improved the size and credit quality of [its] liquidity buffers,” with the liquidity buffer improving to 242% as of the end of 2021.

Fitch further stated that the continuation of this trend should support higher liquidity and solvency assessments, which in turn could lead to an upgrade of the Long-Term IDR.

Commenting on the revised outlook, Ajay Jha, Director of Risk & Compliance at APICORP, said, “The outlook revision affirms APICORP’s solid financial footing and strong credit profile to continue providing a range of financing solutions to support the sustainable future of the MENA region’s energy transition.” 

APICORP is rated ‘Aa2’ by Moody’s, ‘AA’ by Fitch and ‘AA-‘ by S&P.