S&P Global Ratings on March 19 downgraded Kuwait-based Wethaq Takaful Insurance Co. KSCP's long-term local-currency counterparty credit and financial strength ratings to B+ from BB.
The ratings were placed on CreditWatch with negative implications.
The downgrade reflects an increased decline in the company's liquid assets against its liabilities, indicating more pressure on liquidity. Furthermore, the company's capital adequacy and risk profile have deteriorated, S&P said.
S&P noted that Wethaq's liquid assets declined to about 1.8 million Kuwaiti dinars at the end of 2017 from 3.0 million dinars a year earlier, and that if a multiyear downward trend in its liquidity position continues, "we could revise our assessment of liquidity to weak from less than adequate."
The rating agency expects to resolve the CreditWatch within 90 days based on Wethaq's evolving liquidity position.
Investment Dar Co. KSCC owns just under 70% of Wethaq Takaful Insurance.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.
As of March 16, US$1 was equivalent to 0.30 Kuwaiti dinar.