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Kuwait Projects Company (KIPCO) and its senior unsecured bonds have been downgraded a notch to Ba3 from Ba2 by Moody’s. The rating action reflects its expectation that KIPCO’s market value leverage (MVL) will remain above 40%, driven by negative free cash flows of around $75mn in 2023 and the company’s investments in its holding companies. Moody’s expects reduction of KIPCO’s net debt by $150mn in 2023, offset by a decline in portfolio value of the company. Moody’s has maintained a negative outlook on the entity due to its high MVL and low interest coverage ratio.
KIPCO’s dollar bonds traded slightly positive with its 4.5% 2027s up at 87.6 cents on the dollar, yielding 9.1%