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Islamic Corp. for the Dev. of the Priv. Sec. -- Moody's - ICD's credit profile reflects its robust capital position, strong liquidity balanced against weak asset quality

·23 min read

<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>/nwsys/www/images/PBC_1241008</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="date" content="2020-08-25T04:20:27+00:00"/> <style type="text/css"> <!-- .xflip { -moz-transform: scaleX(-1); -webkit-transform: scaleX(-1); -o-transform: scaleX(-1); transform: scaleX(-1); filter: fliph; } .yflip { -moz-transform: scaleY(-1); -webkit-transform: scaleY(-1); -o-transform: scaleY(-1); transform: scaleY(-1); filter: flipv; } .xyflip { -moz-transform: scaleX(-1) scaleY(-1); -webkit-transform: scaleX(-1) scaleY(-1); -o-transform: scaleX(-1) scaleY(-1); transform: scaleX(-1) scaleY(-1); filter: fliph + flipv; } --> </style> </head> <body bgcolor="#A0A0A0" vlink="blue" link="blue"> <!-- Page 1 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft00{font-size:18px;font-family:Times;color:#000000;} .ft01{font-size:18px;font-family:Times;color:#1257c7;} .ft02{font-size:13px;font-family:Times;color:#0d0c0c;} .ft03{font-size:13px;font-family:Times;color:#000000;} .ft04{font-size:13px;font-family:Times;color:#1b62b7;} .ft05{font-size:13px;line-height:30px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page1-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241008001.png" alt="background image"/> <p style="position:absolute;top:155px;left:108px;white-space:nowrap" class="ft00"><b>Research Announcement:&#160;</b></p> <p style="position:absolute;top:155px;left:364px;white-space:nowrap" class="ft01"><b>Moody's - ICD's credit profile reflects its</b></p> <p style="position:absolute;top:180px;left:108px;white-space:nowrap" class="ft01"><b>robust capital position, strong liquidity balanced against weak asset</b></p> <p style="position:absolute;top:204px;left:108px;white-space:nowrap" class="ft01"><b>quality</b></p> <p style="position:absolute;top:240px;left:108px;white-space:nowrap" class="ft02">DIFC - Dubai, August 25, 2020 --</p> <p style="position:absolute;top:281px;left:108px;white-space:nowrap" class="ft03">»&#160;Credit profile supported by its robust capital position and strong liquidity position, balanced</p> <p style="position:absolute;top:301px;left:127px;white-space:nowrap" class="ft03">against weak asset credit quality and poor asset performance.</p> <p style="position:absolute;top:331px;left:108px;white-space:nowrap" class="ft03">»&#160;Shareholder support is constrained by the absence of callable capital but key shareholders</p> <p style="position:absolute;top:351px;left:127px;white-space:nowrap" class="ft03">possess both ability and willingness to provide support, demonstrated through their participation in</p> <p style="position:absolute;top:370px;left:127px;white-space:nowrap" class="ft03">the second general capital increase.</p> <p style="position:absolute;top:406px;left:108px;white-space:nowrap" class="ft02">The Islamic Corporation for the Development of the Private Sector’s (ICD, A2 stable) credit strengths</p> <p style="position:absolute;top:425px;left:108px;white-space:nowrap" class="ft02">lie within its robust liquidity buffer and high quality treasury portfolio, Moody’s Investors Service said</p> <p style="position:absolute;top:445px;left:108px;white-space:nowrap" class="ft05">today in an annual report.<br/>While ICD remained lossmaking in 2019, the size of the losses narrowed significantly, and capital</p> <p style="position:absolute;top:495px;left:108px;white-space:nowrap" class="ft02">adequacy was supported by ongoing payments from shareholders under the second general capital</p> <p style="position:absolute;top:514px;left:108px;white-space:nowrap" class="ft02">increase, in line with our expectations. Shareholder support is also reinforced through the Islamic</p> <p style="position:absolute;top:534px;left:108px;white-space:nowrap" class="ft05">Development Bank's (IsDB, Aaa, stable) continued commitment towards ICD.<br/>“The stable outlook on ICD's rating reflects a balance of positive and negative pressures,” says</p> <p style="position:absolute;top:583px;left:108px;white-space:nowrap" class="ft02">Thaddeus Best, Analyst at Moody’s Investors Service and the report's author. “While a challenging</p> <p style="position:absolute;top:603px;left:108px;white-space:nowrap" class="ft02">operating environment may result in further losses in the equity investment portfolio, we expect</p> <p style="position:absolute;top:622px;left:108px;white-space:nowrap" class="ft02">that the ICD will temper its balance sheet expansion in order to preserve capital.” Moreover, it is</p> <p style="position:absolute;top:642px;left:108px;white-space:nowrap" class="ft02">anticipated that the bank’s increased focus on term lending operations will help ease credit risk over</p> <p style="position:absolute;top:661px;left:108px;white-space:nowrap" class="ft05">the coming years.<br/>The ICD’s main credit weaknesses include its weak asset quality, reflected in the high level of</p> <p style="position:absolute;top:711px;left:108px;white-space:nowrap" class="ft02">nonperforming assets. The absence of callable capital also sets the ICD apart from other, higher</p> <p style="position:absolute;top:731px;left:108px;white-space:nowrap" class="ft05">rated multilateral development banks (MDBs).<br/>Sustained improvements in ICD’s asset quality would contribute towards a rating upgrade. On the</p> <p style="position:absolute;top:781px;left:108px;white-space:nowrap" class="ft02">other hand, larger losses on equity investments, a decline in the loan book’s asset performance</p> <p style="position:absolute;top:800px;left:108px;white-space:nowrap" class="ft02">or a rise in arrears in shareholders’ paid-in capital subscriptions, would all likely lead to a rating</p> <p style="position:absolute;top:820px;left:108px;white-space:nowrap" class="ft05">downgrade.<br/>Subscribers can access the report at:&#160;</p> <p style="position:absolute;top:850px;left:372px;white-space:nowrap" class="ft04">http://www.moodys.com/researchdocumentcontentpage.aspx?</p> <p style="position:absolute;top:869px;left:108px;white-space:nowrap" class="ft04">docid=PBC_1238137</p> <p style="position:absolute;top:900px;left:108px;white-space:nowrap" class="ft02">NOTE TO JOURNALISTS ONLY: For more information, please call one of our global</p> <p style="position:absolute;top:919px;left:108px;white-space:nowrap" class="ft02">press information hotlines: New York <PhoneNo>+1-212-553-0376</PhoneNo>, London <PhoneNo>+44-20-7772-5456</PhoneNo>, Tokyo</p> <p style="position:absolute;top:939px;left:108px;white-space:nowrap" class="ft02"><PhoneNo>+813-5408-4110</PhoneNo>, Hong Kong <PhoneNo>+852-3758-1350</PhoneNo>, Sydney <PhoneNo>+61-2-9270-8141</PhoneNo>, Mexico City</p> <p style="position:absolute;top:958px;left:108px;white-space:nowrap" class="ft02"><PhoneNo>001-888-779-5833</PhoneNo>, São Paulo <PhoneNo>0800-891-2518</PhoneNo>, or Buenos Aires <PhoneNo>0800-666-3506</PhoneNo>. You can also email</p> <p style="position:absolute;top:978px;left:108px;white-space:nowrap" class="ft05">us at mediarelations@moodys.com or visit our web site at www.moodys.com.<br/>This publication does not announce a credit rating action. For any credit ratings referenced in this</p> <p style="position:absolute;top:1027px;left:108px;white-space:nowrap" class="ft02">publication, please see the ratings tab on the issuer/entity page on&#160;</p> <p style="position:absolute;top:1027px;left:574px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:1027px;left:701px;white-space:nowrap" class="ft02">&#160;for the most</p> <p style="position:absolute;top:1047px;left:108px;white-space:nowrap" class="ft02">updated credit rating action information and rating history.</p> </div> <!-- Page 2 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft06{font-size:13px;line-height:23px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page2-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241008002.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">Thaddeus Best</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft02">Analyst</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft02">Sovereign Risk Group</p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Middle East Limited</p> <p style="position:absolute;top:192px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 44 20 7772 5456</p> <p style="position:absolute;top:211px;left:108px;white-space:nowrap" class="ft05">Client Service: 44 20 7772 5454<br/>Marie Diron</p> <p style="position:absolute;top:261px;left:108px;white-space:nowrap" class="ft02">MD-Sovereign/Sub Sovereign</p> <p style="position:absolute;top:280px;left:108px;white-space:nowrap" class="ft02">Sovereign Risk Group</p> <p style="position:absolute;top:300px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Singapore Pte. Ltd.</p> <p style="position:absolute;top:319px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 44 20 7772 5456</p> <p style="position:absolute;top:339px;left:108px;white-space:nowrap" class="ft05">Client Service: 44 20 7772 5454<br/>Releasing Office:</p> <p style="position:absolute;top:389px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Middle East Limited</p> <p style="position:absolute;top:408px;left:108px;white-space:nowrap" class="ft02">Regulated by the DFSA</p> <p style="position:absolute;top:428px;left:108px;white-space:nowrap" class="ft02">Gate Precinct 3, Level 3</p> <p style="position:absolute;top:447px;left:108px;white-space:nowrap" class="ft02">P.O. Box 506845</p> <p style="position:absolute;top:467px;left:108px;white-space:nowrap" class="ft02">DIFC - Dubai</p> <p style="position:absolute;top:486px;left:108px;white-space:nowrap" class="ft02">UAE</p> <p style="position:absolute;top:506px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 44 20 7772 5456</p> <p style="position:absolute;top:525px;left:108px;white-space:nowrap" class="ft02">Client Service: 44 20 7772 5454</p> <p style="position:absolute;top:615px;left:108px;white-space:nowrap" class="ft02">© 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their</p> <p style="position:absolute;top:634px;left:108px;white-space:nowrap" class="ft06">licensors and affiliates (collectively, “MOODY’S”). All rights reserved.<br/>CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. 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Because of the possibility of human or mechanical error as well as other</p> <p style="position:absolute;top:592px;left:108px;white-space:nowrap" class="ft02">factors, however, all information contained herein is provided “AS IS” without warranty of any kind.</p> <p style="position:absolute;top:612px;left:108px;white-space:nowrap" class="ft02">MOODY'S adopts all necessary measures so that the information it uses in assigning a credit</p> <p style="position:absolute;top:631px;left:108px;white-space:nowrap" class="ft02">rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when</p> <p style="position:absolute;top:651px;left:108px;white-space:nowrap" class="ft02">appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot</p> <p style="position:absolute;top:670px;left:108px;white-space:nowrap" class="ft02">in every instance independently verify or validate information received in the rating process or in</p> <p style="position:absolute;top:690px;left:108px;white-space:nowrap" class="ft06">preparing its Publications.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:732px;left:108px;white-space:nowrap" class="ft02">representatives, licensors and suppliers disclaim liability to any person or entity for any indirect,</p> <p style="position:absolute;top:752px;left:108px;white-space:nowrap" class="ft02">special, consequential, or incidental losses or damages whatsoever arising from or in connection</p> <p style="position:absolute;top:771px;left:108px;white-space:nowrap" class="ft02">with the information contained herein or the use of or inability to use any such information, even if</p> <p style="position:absolute;top:791px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers</p> <p style="position:absolute;top:810px;left:108px;white-space:nowrap" class="ft02">is advised in advance of the possibility of such losses or damages, including but not limited to:</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft02">(a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft06">financial instrument is not the subject of a particular credit rating assigned by MOODY’S.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:892px;left:108px;white-space:nowrap" class="ft02">representatives, licensors and suppliers disclaim liability for any direct or compensatory losses</p> <p style="position:absolute;top:911px;left:108px;white-space:nowrap" class="ft02">or damages caused to any person or entity, including but not limited to by any negligence (but</p> <p style="position:absolute;top:931px;left:108px;white-space:nowrap" class="ft02">excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt,</p> <p style="position:absolute;top:950px;left:108px;white-space:nowrap" class="ft02">by law cannot be excluded) on the part of, or any contingency within or beyond the control of,</p> <p style="position:absolute;top:970px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers,</p> <p style="position:absolute;top:989px;left:108px;white-space:nowrap" class="ft02">arising from or in connection with the information contained herein or the use of or inability to use</p> <p style="position:absolute;top:1009px;left:108px;white-space:nowrap" class="ft02">any such information.</p> </div> <!-- Page 4 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page4-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1241008004.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft02">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft02">ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE</p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft06">BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.<br/>Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s</p> <p style="position:absolute;top:215px;left:108px;white-space:nowrap" class="ft02">Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and</p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft02">municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s</p> <p style="position:absolute;top:254px;left:108px;white-space:nowrap" class="ft02">Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s</p> <p style="position:absolute;top:273px;left:108px;white-space:nowrap" class="ft02">Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from</p> <p style="position:absolute;top:293px;left:108px;white-space:nowrap" class="ft02">$1,000 to approximately $2,700,000. MCO and Moody’s Investors Service also maintain policies</p> <p style="position:absolute;top:312px;left:108px;white-space:nowrap" class="ft02">and procedures to address the independence of Moody’s Investors Service credit ratings and credit</p> <p style="position:absolute;top:332px;left:108px;white-space:nowrap" class="ft02">rating processes. Information regarding certain affiliations that may exist between directors of MCO</p> <p style="position:absolute;top:351px;left:108px;white-space:nowrap" class="ft02">and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and</p> <p style="position:absolute;top:371px;left:108px;white-space:nowrap" class="ft02">have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted</p> <p style="position:absolute;top:390px;left:108px;white-space:nowrap" class="ft02">annually at&#160;</p> <p style="position:absolute;top:390px;left:188px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:390px;left:315px;white-space:nowrap" class="ft02">&#160;under the heading “Investor Relations — Corporate Governance —</p> <p style="position:absolute;top:410px;left:108px;white-space:nowrap" class="ft06">Director and Shareholder Affiliation Policy.”<br/>Additional terms for Australia only: Any publication into Australia of this document is pursuant to the</p> <p style="position:absolute;top:452px;left:108px;white-space:nowrap" class="ft02">Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited</p> <p style="position:absolute;top:472px;left:108px;white-space:nowrap" class="ft02">ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136</p> <p style="position:absolute;top:491px;left:108px;white-space:nowrap" class="ft02">972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale</p> <p style="position:absolute;top:511px;left:108px;white-space:nowrap" class="ft02">clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access</p> <p style="position:absolute;top:530px;left:108px;white-space:nowrap" class="ft02">this document from within Australia, you represent to MOODY’S that you are, or are accessing</p> <p style="position:absolute;top:550px;left:108px;white-space:nowrap" class="ft02">the document as a representative of, a “wholesale client” and that neither you nor the entity you</p> <p style="position:absolute;top:569px;left:108px;white-space:nowrap" class="ft02">represent will directly or indirectly disseminate this document or its contents to “retail clients” within</p> <p style="position:absolute;top:589px;left:108px;white-space:nowrap" class="ft02">the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as</p> <p style="position:absolute;top:608px;left:108px;white-space:nowrap" class="ft02">to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or</p> <p style="position:absolute;top:628px;left:108px;white-space:nowrap" class="ft06">any form of security that is available to retail investors.<br/>Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency</p> <p style="position:absolute;top:670px;left:108px;white-space:nowrap" class="ft02">subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc.,</p> <p style="position:absolute;top:690px;left:108px;white-space:nowrap" class="ft02">a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating</p> <p style="position:absolute;top:709px;left:108px;white-space:nowrap" class="ft02">agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization</p> <p style="position:absolute;top:729px;left:108px;white-space:nowrap" class="ft02">(“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-</p> <p style="position:absolute;top:748px;left:108px;white-space:nowrap" class="ft02">NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated</p> <p style="position:absolute;top:768px;left:108px;white-space:nowrap" class="ft02">obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit</p> <p style="position:absolute;top:787px;left:108px;white-space:nowrap" class="ft02">rating agencies registered with the Japan Financial Services Agency and their registration numbers</p> <p style="position:absolute;top:807px;left:108px;white-space:nowrap" class="ft06">are FSA Commissioner (Ratings) No. 2 and 3 respectively.<br/>MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft02">corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated</p> <p style="position:absolute;top:869px;left:108px;white-space:nowrap" class="ft02">by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to</p> <p style="position:absolute;top:888px;left:108px;white-space:nowrap" class="ft02">MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging</p> <p style="position:absolute;top:908px;left:108px;white-space:nowrap" class="ft06">from JPY125,000 to approximately JPY250,000,000.<br/>MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory</p> <p style="position:absolute;top:950px;left:108px;white-space:nowrap" class="ft02">requirements.</p> </div> </body> </html>