S&P cuts Kuwait Projects

S&P said it downgraded the issuer rating for Kuwait Projects Co. (Holding) KSC (Kipco) to BB- from BB and its Gulf Cooperation Council regional scale rating to gcBBB- from gcBBB+.

“The low performance of key portfolio companies has weighed materially on Kipco's leverage, cash flow and average portfolio credit quality over the past few years. We've considered the continued sluggishness of these assets, alongside the group's weak track record of investment and dividend returns, increasing leverage, negative progress of Kipco's net asset value generation, and lack of portfolio rotation outside intragroup transactions over the recent years,” the agency said in a press release.

“Kipco will face large maturities in 2023, and its cash flow from investments is likely to remain muted over this time. Although we foresee no immediate liquidity pressure, we no longer see its financial policy as more favorable than peers'. We therefore negatively reassessed the group's liquidity to adequate from strong,” S&P said.

The outlook is negative.

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