Moody's downgrades Kipco

Moody's Investors Service said it downgraded Kuwait Projects Co. (Holding) KSC (Kipco) corporate family rating to Ba2 from Ba1 and probability of default rating to Ba2-PD from Ba1-PD. Concurrently, the agency downgraded to Ba2 from Ba1 the ratings on the backed senior unsecured bonds due in 2023, 2026 and 2027 issued by Kuwait Projects Co SPC Ltd.

"Today's rating action reflects the view, that despite the rights issue which Kipco recently announced, the company's market value leverage will remain elevated above what is required for the Ba1 CFR," said Julien Haddad, a Moody's vice president, senior analyst and local market analyst for Kipco.

"The rating action also reflects Kipco's continued cash burn and weak interest coverage on the back of a substantial decrease in dividend income in 2021," Haddad added.

The outlook remains negative.

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