Fitch Confirms KEPCO's 'BB' Rating

Kuwait Projects Company (KIPCO) announced that Fitch Ratings affirmed its long-term issuer default rating at “BB” with a stable outlook. The assessment was based on KIPCO’s diversified investment portfolio, the stability of dividend income received from its investments across various economic cycles, its track record of generating long-term investment returns, and its financial flexibility. Fitch also assigned a “BB” long-term issuer default rating to KIPCO’s updated Euro Medium-Term Note program, consistent with the company’s long-term credit rating.

The affirmation of the rating comes despite challenging regional conditions. Fitch noted that KIPCO’s diversified investment portfolio, which spans multiple sectors in the Middle East and North Africa, along with its financial flexibility, have helped mitigate the impact of regional developments on the group’s asset valuations and operational performance. The agency also highlighted the group’s track record of divestments, its ability to influence the management of its portfolio companies, and the support it receives from its major shareholders.

Fitch pointed to the credit strength of KIPCO’s two largest investments in its portfolio, Bank of Kuwait and the National Bank (Boubyan) and Saudi Dairy and Foodstuff Company (Sudac), which together account for 41% of the total value of the investment portfolio’s assets. The agency also noted that many of the group’s companies hold leading positions in their respective markets.

Fitch commended KIPCO’s approach to effective portfolio management and its ability to reduce debt through strategic divestments. It explained that the sale of Gulf Insurance Group in 2024 and other divestments in 2025 contributed to debt reduction and enhanced liquidity.

The agency also underscored KIPCO’s strong liquidity position, noting that the group’s cash balance stood at $1.1 billion, sufficient to cover debt maturities through early 2028. Fitch expects the group’s net debt-to-asset ratio to remain below 45% over the next four years, with potential decline toward the target level of 40% if asset valuations improve.

On his part, Mustafa Al-Shami, Chief Financial Officer of KIPCO Group, said: “The affirmation of our credit rating amid challenging regional conditions clearly demonstrates the resilience of our diversified investment portfolio and the disciplined financial approach underpinning our strategy. Our focus on effective portfolio management, strategic divestments from certain assets, and prudent debt management has enhanced the group’s liquidity and financial flexibility, enabling us to navigate market volatility and meet our financial obligations. Furthermore, the rating of our updated Euro Medium-Term Note program strengthens our access to global debt markets. We will continue to work on strengthening our financial position, improving the efficiency of our investment portfolio, and delivering sustainable value to our shareholders in the long term.”