S&P rates Kipco gcAA-

Standard & Poor’s said it assigned a gcAA- long-term Gulf Cooperation Council regional scale rating to Kuwait Projects Co. (Holding) KSC (Kipco).

The agency also said it assigned a gcAA- long-term regional scale rating to Kipco, which aligns with the BBB- global long-term rating on the company.

The ratings provide a finer distinction of relative credit risk within a country than is possible with global scale credit ratings, S&P said.

The ratings reflect Kipco’s status as a majority-owned company of Al Futtooh Holding Co. KSC, which is connected to Kuwait’s ruling Al Sabah family and the family’s affiliated entities, the agency said.

As a long-term owner, S&P said it expects the family to continue providing financial support for Kipco when needed.

This has been needed on several occasions in the past, most recently in late 2011 through a $101 million cash injection that helped Kipco maintain its target loan-to-value ratio of 30%, the agency said.

The ratings reflect the group’s large investment portfolio, adequate portfolio quality and large controlling stakes in portfolio companies with strategic influence and control over the dividend policy, S&P said.

The ratings also consider the company’s considerable asset risk, owing to limited diversification since its three largest assets constitute nearly 70% of the portfolio, the agency said.

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