S&P Global Ratings introduces Saudi Arabia national credit rating scale

Saudi National Bank assigned 'ksaAAA' national scale rating

  

S&P Global Ratings introduced a new credit rating scale--the Kingdom of Saudi Arabia national credit rating scale (KSA scale) --for the assignment of credit ratings to issuers domiciled in Saudi Arabia. The new national credit rating scale will facilitate credit-risk comparisons among KSA-related issuers and issuances.

The KSA scale is designed for issuers based in Saudi Arabia and for local currency-denominated capital markets debt, bank loans, and shariah-compliant obligations issued in Saudi Arabia. It complements the existing global rating scale and may offer finer credit risk differentiation within Saudi Arabia for issuers, counterparties, intermediaries, investors, and insurers involved in Saudi Arabia's financial markets by providing independent opinions of relative creditworthiness.

S&P Global Ratings has assigned Saudi National Bank (SNB), the first in the Kingdom, its 'ksaAAA' long-term Saudi Arabia national scale issuer credit rating. SNB benefits from its leading market position in Saudi Arabia; its strong capitalization, supported by sound pre-provision earnings capacity, which provides good capital buffers to absorb any unexpected increase in credit losses. 'ksaAAA' is the highest issuer credit rating assigned according to Saudi Arabia national scale.

Market participants can gain valuable information about local issuers and issuances that have received national scale ratings, since S&P create them specifically for the unique Saudi market.

To finance Vision 2030, Saudi Arabia's plan to transform and diversify its economy and grow its private sector, the authorities aim to deepen the Kingdom's capital markets. Given this initiative, there is an increased activity and investor interest in Saudi Arabia's local currency debt markets. Moreover, since 2017 the Kingdom has launched a monthly local currency sukuk issuance program, building a liquid local currency government bond market and yield curve. As the Kingdom is developing the infrastructure for broader local market participation and foreign direct investment in its capital markets, the S&P Global Ratings’ KSA scale may provide a helpful basis of comparison of local credits and enhance transparency between Saudi local currency issuances.

The KSA scale ratings could be assigned to any KSA-domiciled issuer including corporates, banks, insurance companies and sovereigns at their request and would be identifiable by the prefix " ksa" (for example, ksaAA+) and feature both long and short-term ratings. The highest long-term rating is 'ksaAAA' and the highest short-term rating is 'ksaA-1+'.

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Media contacts:
Mohamed Ali, S&P Global Ratings, +971 4 3727146

About S&P Global Ratings

S&P Global Ratings is the world's leading provider of independent credit ratings. Our ratings are essential to driving growth, providing transparency and helping educate market participants so they can make decisions with confidence. We have more than 1 million credit ratings outstanding on government, corporate, financial sector and structured finance entities and securities. We offer an independent view of the market built on a unique combination of broad perspective and local insight. We provide our opinions and research about relative credit risk; market participants gain independent information to help support the growth of transparent, liquid debt markets worldwide.

S&P Global Ratings is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit www.spglobal.com/ratings

About KSA Scale Ratings

S&P developed the KSA scale to assign credit ratings to issuers in Saudi Arabia in 2021. The scale features both long- and short-term ratings. The highest long-term rating is 'ksaAAA' and the highest short-term rating is 'ksaA-1+'. KSA scale ratings will feature the identifying prefix ksa. The criteria used to evaluate the ratings include business risk, financial risk, and other elements of credit risk, like the global scale ratings. Given the focus on credit quality within the KSA, they are not comparable to other regional or national scales. The Credit Ratings can be assigned to any KSA-domiciled issuer including corporates, financial institutions, banks, insurance companies and sovereigns at their request.

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