Fitch Ratings has upgraded Tunisia’s Arab International Lease (AIL)’s National Long- and Short-Term ratings to ‘A+(tun)’ from ‘BBB+(tun)’ and ‘F1(tun)’ from ‘F2(tun)’, respectively.
The Outlook on the National Long-Term rating is Stable.
The upgrades reflect the material increase in Banque Tuniso-Koweitienne’s (BTK) control of AIL’s capital. Since March 2, 2012, AIL is 95%-owned (against 65% at end-2011) by BTK, which in turn is 60%-owned by France’s Groupe BPCE (GBPCE, ‘A+’/Negative).
AIL’s ratings are underpinned by the support that AIL can expect, if required, from its main direct shareholder, BTK, and from its ultimate parent, GBPCE.
Although GBPCE has strong capacity to support AIL, Fitch views the probability of such support as moderate given that GBPCE is not a direct majority shareholder and given AIL’s limited strategic importance to GBPCE.
AIL is moderately integrated within BTK, which mainly controls AIL’s credit and liquidity risks through periodic committees. Stronger integration with BTK would result in an upgrade of AIL’s national ratings.
A downgrade of AIL’s national ratings could be triggered by a decrease of BTK’s control in AIL, materially reduced GBPCE’s interests in BTK or a significant downgrade of GBPCE’s ratings, all of which Fitch considers unlikely in the foreseeable future.
The rating actions are as follows:
AIL:
National Long-term rating: upgraded to ‘A+ (tun)’ from ‘BBB+ (tun)’; Outlook Stable
National Short-term rating: upgraded to ‘F1 (tun)’ from ‘F2 (tun)’
National Senior unsecured debt rating: upgraded to ‘A+ (tun)’ from ‘BBB+ (tun)’
