Mumtalakat boost as Fitch affirms ratings
Manama, December 13, 2012
Fitch Ratings has affirmed Bahrain Mumtalakat Holding Company's Long-Term Issuer Default Rating (IDR) and senior unsecured rating at BBB, said a report.
Fitch has also affirmed Mumtalakat's Short-Term IDR at F3. The outlook on the Long-Term IDR is Stable, according to the report in our sister publication the Gulf Daily News.
Mumtalakat's $750 million, five per cent notes, due on June 30, 2015, and Malaysian ringgit 300m sukuk, due on October 3, 2017 have also been affirmed at BBB. The agency continues to apply its parent and subsidiary rating linkage methodology in rating Mumtalakat as it believes that a strong relationship exists between the company and Bahrain ('BBB'/Stable/'F3').
"Fitch Ratings believes that a strong relationship exists between Mumtalakat and Bahrain, following its parent and subsidiary rating linkage methodology," Fitch said.
"However, ratings that factor in implicit state support will always be subject to the very real event risk of changes in the political approach by the sovereign.
"Mumtalakat is 100 per cent owned by Bahrain and is the government's investment arm.
"It was established in June 2006 as an independent holding company for the government's non-oil and gas assets.
"The viability of Mumtalakat's business model is dependent on continued strong linkages with the sovereign, its strategic importance as a holding company for the government's non-oil and gas assets, and its low level of leverage relative to Bahrain's rating," it said.
"It is an active investor in diverse business and industry sectors in over 35 commercial enterprises, nationally and internationally.
"Mumtalakat has received government shares since its inception in state-owned enterprises, funds and free land, to manage and operate its subsidiaries," Fitch added.
"Although government support falls short of an explicit debt guarantee, Fitch considers Mumtalakat's high profile and strategic role to mean that support would be provided if required." it said. – TradeArabia News Service
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