Rat­ing agency CI raises rat­ing of Alargan bonds to ‘BBB’

Kuwait Times - - BUSINESS -

Cap­i­tal In­tel­li­gence (CI), the in­ter­na­tional credit rat­ing agency, yes­ter­day an­nounced that it has raised its rat­ing on the KD26.5 mil­lion bond is­sued by ALARGAN In­ter­na­tional Real Es­tate Com­pany in April 2012 to “BBB” and re­vised the outlook to “sta­ble” from a pre­vi­ous “BBB-” rat­ing and “pos­i­tive” outlook is­sued in De­cem­ber last year. The raise was sup­ported by iden­ti­fied re­sources (cash plus unuti­lized com­mit­ted fund­ing lines) in place to re­pay the obli­ga­tion. The rat­ing up­grade also re­flects the in­crease in equity and the fall in debt (and there­fore lever­age).

The rat­ing agency also said in its re­port that ALARGAN en­joys a sound fi­nan­cial pro­file, a ge­o­graph­i­cally di­ver­si­fied busi­ness model, and a good fund­ing struc­ture with close to no re­liance on short-term bank bor­row­ing (though the bond has now be­come a cur­rent li­a­bil­ity as it ma­tures in April 2017). CI also high­lighted that the com­pany’s on­go­ing changes to the busi­ness model have al­ready be­gun to lower the over­all risk gen­er­ated from the sec­tor in which it op­er­ates through the pro­por­tion of rev­enues com­ing from re­cur­ring rental in­come steadily in­creas­ing over time.

CI said that the re­main­ing bor­row­ing amount of the com­pany is not con­sid­ered large enough to im­pact the rat­ing, while more than three quar­ters is re­payable af­ter the ma­tu­rity date of the bond. In ad­di­tion, ALARGAN has a solid bal­ance sheet with im­proved fi­nan­cial ra­tios, which are fore­cast to re­main strong through­out the short re­main­ing life span of the bond.

Com­ment­ing on the rat­ing, Khaled Al-Me­shaan, CEO and Vice Chair­man of the Board of Direc­tors of ALARGAN In­ter­na­tional Real Es­tate Com­pany, said: “The Cap­i­tal In­tel­li­gence rat­ing con­firms once again the com­pany’s sta­ble po­si­tion. ALARGAN is com­mit­ted to de­liv­er­ing sus­tain­abil­ity in every as­pect of its busi­ness, in­clud­ing en­sur­ing the busi­ness model is sus­tain­able fi­nan­cially and op­er­a­tionally for the ben­e­fit of share­hold­ers and stake­hold­ers. As we move for­ward, ALARGAN will con­tinue to fo­cus on gen­er­at­ing steady rev­enue through de­vel­op­ments that add value to their sur­round­ing com­mu­ni­ties.”

Khaled Al-Me­shaan, ALARGAN In­ter­na­tional Real Es­tate

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