MANAMA: Gulf Finance House (GFH) elaborated on the recent upgrade in credit rating assigned by Capital Intelligence (CI).
Capital Intelligence (CI) in its announcement declared the following, while raising GFH’s Long-Term Rating to ‘BB’ from ‘BB-‘ and affirmed the Short-Term Rating at ‘B’. The Outlook for GFH’s ratings reverts to ‘Stable’ from ‘Positive’ following the rating action.
“Gulf Finance House (GFH), in common with other Islamic and conventional investment companies in the Gulf Cooperation Council (GCC) region, had suffered a major setback in credit metrics and operations following the domestic and regional financial crisis in 2009. As well as experiencing a dramatic worsening of asset quality, the Company was also hit by a severe liquidity squeeze which forced debt restructuring with lenders and suspension of new investment. GFH has since successfully paid down debt and rebuilt its capital base. Concurrently, leverage has improved noticeably due to the twin effect of debt repayment and successive increases in equity over the past three years. Indeed, the success of the capital increase (under the convertible Murabaha programme), amid ongoing challenging market conditions, underscores the high degree of investor demand for Shari’a compliant products, as well as rather strong shareholder support.”