&P Assigns Global 'BBB/A-3' Ratings; Outlook Stable
Global Investment House "Global" announced today Standard & Poors (S&P), has assigned Global 'BBB/A-3' long- and short-term counterparty ratings with a stable outlook.
In its report, S&P cited that ratings on Global reflect its strong capitalization, good market position, consistent strategy, and high although potentially cyclical profitability. The ratings also reflect Global's stand-alone creditworthiness and do not factor in potential external support from shareholders or authorities. Negative rating factors include the company's short track record, small size by international standards--with a reliance on a limited number of key individuals, weak funding and liquidity profile as a wholesale entity, and high investment in private equity.
With total assets of $5.2 billion and assets under management (AUM) of $9.5 billion at mid-year 2008, albeit small by international standards, the company enjoys a leading regional status and benefits from a large and increasingly diversified investor base. Global intends to enlarge its regional footprint through the expansion of its branch network and the acquisition of strategic stakes into regional financial institutions.
Following the capital increase in May 2008 through the raise of USD 1.15 billion (through a Global Depository Receipts issue), Global's adjusted total equity (ATE)-to-total assets ratio jumped to a strong 48.3% at mid-year 2008 from 21.8% on March 31, 2008. This capital hike demonstrates Global's strong financial flexibility and willingness to make capital keep up with investment needs, as well as maintain leverage at adequate levels given the company's fast-paced growth and future plans.
Mrs. Maha Al-Ghunaim, Chairperson and Managing Director at Global expressed the Company’s satisfaction with the ratings for the company, which highlight its commitment towards excellence as a region’s leading asset management and investment banking firm with a value added profile in the GCC and MENA regions capital markets.
Mrs. Al-Ghunaim concluded that “Since our inception in 1998, we have achieved growth in all key financial performance indicators, reflecting success of our core strategies and business model accompanied by moderate risk taking leading to an investment grade rating.”
