Kuwait Projects Co SPC Limited

Rating action by Moody's Investors Service (Moody's)

Kuwait Projects Company (Holding) K.S.C.P. (KIPCO), the Guarantor of Kuwait Projects Co SPC Limited, announced that Moody's has downgraded its Corporate Family Rating (CFR) to Ba3 from Ba2 and the Probability of Default Rating (PDR) to Ba3-PD from Ba2-PD. Concurrently, Moody's downgraded to (P)Ba3 from (P)Ba2 the provisional ratings assigned to the senior unsecured $3 billion Euro Medium Term Note (EMTN) program issued by Kuwait Projects Co SPC Limited and to Ba3 from Ba2 the ratings on the backed senior unsecured bonds due in 2026 and 2027 issued by Kuwait Projects Co SPC Limited. Moody's also affirmed Kuwait Projects Co SPC Limited's (P)NP backed short term rating. The outlook on all ratings remains negative.  Rating action reflects Moody's expectation that KIPCO's market value leverage (MVL) will remain above 40%, which is higher than what the rating agency originally anticipated.

KIPCO's Ba3 CFR continues to reflect (1) the portfolio of companies' strong market positions in the financial services and chemicals industries within the MENA region; (2) the historical track record of maintaining a strong liquidity profile with the expectation of around $500 million in cash at holding level as of December 2023 and the propensity to actively prefund debt maturities to remove refinancing risk; (3) pro-active steps being taken by the KIPCO's management to strengthen operating and financial performance of major holdings; and (4) shareholder linkages with Kuwait's ruling family.

The ratings also capture (1) the high asset concentration with KIPCO's three largest holdings making up close to 50% of KIPCO's investment portfolio value (excluding cash); (2) capital reinvestment strategy within its subsidiaries which results in low dividends up streamed and the expectation of a low FFO interest coverage ratio at holdco level as of December 2023; and (3) the geographical concentration in MENA, that has areas of heightened geopolitical and macroeconomic risks.

For further information, please contact:

Investors, Press and Media:

Eman Al-Awadhi

49^th Floor

KIPCO Tower, Khaled Bin Al-Waleed St, Sharq

P.O. Box 23982

Safat 13100

Kuwait

Tel: +965 2294 3416

Email: [email protected]