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Bond Market News
Kuwait Projects Downgraded to B1 by Moody’s
December 17, 2024
Kuwait Projects Company K.S.C.P. ‘s (KIPCO) was downgraded by a notch to B1 from Ba3 by Moody’s. The downgrade reflects Moody’s view that KIPCO’s market value leverage will remain above 45% through 2024 and 2025, higher than previously anticipated. This is mainly a consequence of KIPCO not divesting certain non-core assets and investing more into portfolio companies which has led to higher debt levels. Moody’s expects KIPCO to generate negative free cash flow of around $37mn and its FFO interest coverage to remain weak at 0.8x in 2024. KIPCO has adequate liquidity for the next 12 months, with a cash balance of $503mn and an upcoming $165mn payment from the GIG sale. However, delays in securing funding for bond maturities due in 2026 and 2027 could significantly weaken liquidity.
Its dollar bonds traded stable with its 4.5% 2027s at 93.7 cents on the dollar, yielding 7.7%.
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