RAM Ratings reaffirms Gulf Investment Corporation’s AAA ratings

Published on 27 Jan 2022.

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RAM Ratings has reaffirmed Gulf Investment Corporation G.S.C.’s (GIC or the Corporation) AAA/Stable/P1 corporate credit ratings as well as the AAA/Stable ratings of its RM400 million Senior Unsecured Bonds (2008/2023) and RM3.5 billion Sukuk Wakalah bi Istithmar Programme (2011/2031). 

The rating actions consider our view that extraordinary support from GIC’s Gulf Co-operation Council (GCC) shareholders – particularly the United Arab Emirates, Qatar, Kuwait and Saudi Arabia – will be forthcoming in times of need as the Corporation continues to uphold its unique mandate of promoting the GCC region’s development. The credit profiles of the sovereigns have remained stable, although geopolitical tensions and lingering economic consequences of Covid-19 are some downside risks in the immediate future.

Apart from shareholder support, GIC’s credit strength is anchored on its low leverage, sturdy capitalisation and healthy liquidity, counterbalanced by an inherently volatile profit performance given the Corporation’s dependence on market-sensitive income. Consequent to impairment losses of USD77 mil made on principal investments (PIs) and a lower earnings contribution from these investees amid the pandemic, GIC sustained a pre-tax loss of USD35 mil in FY Dec 2020. 

On the back of economic revitalisation across the globe since early 2021, the Corporation has made no further impairments on PI assets. This, alongside the better investment performance of its Global Markets division, turned GIC’s pre-tax profit positive to USD94 mil in 1H FY Dec 2021. Investments in regional power plants – backed by long-term power purchase agreements with GCC governments – will afford the Corporation some stable stream of income, but the lagged recovery of equity accounted income from other investees and rising bond yields might continue to hamper its bottom line in the coming quarters. 

GIC’s leverage stayed low at around 1.3 times while its tier-1 capital ratio was still a strong 37.9% as at end-June 2021. Liquidity remained sound, with liquid assets worth USD1.5 bil providing more than 2 times cover of short-term funding on the same date.


Analytical contacts
Timothy Goh
(603) 3385 2496

Sophia Lee
(603) 3385 2577


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2022 by RAM Rating Services Berhad

Rating Rationale

Ratings on Gulf Investment Corporation GSC