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Moody's Investors Service on Monday assigned an A1 long term issuer rating (Global Scale Rating (GSR)) and a1 Baseline Credit Assessment (BCA) to Public Investment Fund (PIF), the kingdom's sovereign wealth fund.
The agency also assigned an Aaa.sa long term issuer national scale rating (NSR) for PIF. The outlook on all ratings is stable.
This is the first time Moody's has assigned a rating to PIF.
The rating reflects its standalone creditworthiness as expressed, combined with a 'very high' level of interdependence between the kingdom and PIF and a 'very high' likelihood of extraordinary support being provided to PIF from the kingdom if ever required.
The ratings consider factors such as total assets of 1.24 trillion riyals ($330 billion), based on standalone financials and 2.06 trillion riyals ($549 billion), based on consolidated financials, and underpinned by a steady dividend income stream and a high-quality investment portfolio.
It also considers sector diversification and very strong financial profile with very low leverage and very high interest, and an excellent liquidity profile.
"Both PIF's BCA and issuer rating are two notches below the scorecard indicated rating (Aa2) because they are constrained by Saudi Arabia's A1 sovereign rating, given the strong credit interlinkages between the Kingdom and PIF," said Moody's.
The PIF's board is chaired by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, and its members are appointed by Royal order.
Last week Fitch Ratings also assigned PIF an 'A' credit rating in line with the kingdom’s strong support for the fund.
"For the last three years the government's cash injections to PIF totalled SAR 288.8 billion ($77 billion) and represented on average close to 10% of the fund's total assets," Fitch said.
(Writing by Brinda Darasha; editing by Seban Scaria)
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