TEXT-Fitch affirms Tunisie Leasing ratings at 'BBB+(tun)'

Thu Aug 2, 2012 12:01pm EDT

Aug 2 - Fitch Ratings has affirmed Tunisie Leasing's (TL) National
Long-term rating at 'BBB+(tun)' and Short-term rating at 'F2(tun)'. The Outlook
on the National Long-term rating is Stable. A full list of rating actions is at
the end of this comment.

RATING DRIVERS
TL's ratings reflect its acceptable asset quality and advanced risk management
compared to its peers and satisfactory profitability. They also factor in TL's
fragile liquidity.

TL's funding profile is significantly geared towards bond issuance and the
company's liquidity is consequently constrained when turbulence occurs in this
small market. Although TL regained access to the Tunisian bond market in Q311,
liquidity tensions persist, mirrored by higher refinancing costs. In addition,
TL's liquidity buffer, consisting of committed undrawn credit lines, remains
limited compared to its ambitious annual funding requirements. Nonetheless,
Fitch considers TL's main shareholder, Amen Bank, could somewhat increase its
funding contribution to its subsidiary.

TL's asset quality, although under pressure, remains acceptable and better than
that of the sector average. Fitch considers that TL's well managed risk
management compared to peers is likely to prevent severe asset quality
deterioration.

TL's resilient profitability is supported by strong revenues generated by its
Algerian leasing subsidiary, Maghreb Leasing Algerie. TL's profitability in its
Tunisian market in 2011 was hampered by significant loan impairment charges and
lower lending volumes, but Fitch considers TL will be able to deliver
satisfactory profitability in 2012 given the improved -albeit still fragile-
operating environment. Nonetheless, if there was more severe liquidity stress in
Tunisia's bond market and banking system, TL would have to limit its new loan
volumes.

Fitch considers TL's capital base to be adequate given its risk profile and
conservative risk management.

SENSITIVITIES
Fitch considers that a severe deterioration of TL's access to liquidity, notably
constraints to tap the Tunisian bond market, would likely lead to downgrade of
its ratings. A similar rating action could be taken in case of weakening asset
quality, with significant impact on its profitability and capital.

Upside potential of TL's ratings is limited by its fragile liquidity.

The rating actions are as follows:

National Long-term rating: affirmed at 'BBB+(tun)'; Stable Outlook
National Short-term rating: affirmed at 'F2(tun)'; Stable Outlook
National senior unsecured debt rating: affirmed at 'BBB+(tun)'
National subordinated debt rating: affirmed at 'BB+(tun)


Additional information is available on www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable criteria, 'Global Financial Institutions Rating Criteria, dated 16
August 2011', 'Finance and Leasing Companies Criteria', dated 12 December 2011,
'National Ratings-Methodology Update', dated 19 January 2011, 'Evaluating
Corporate Governance', date 13 December 2011 and 'Recovery Ratings for Financial
Institutions' dated 16 August 2011 are available at www.fitchratings.com.

Note to Editors: Fitch's National ratings provide a relative measure of
creditworthiness for rated entities in countries with relatively low
international sovereign ratings and where there is demand for such ratings. The
best risk within a country is rated 'AAA' and other credits are rated only
relative to this risk. National ratings are designed for use mainly by local
investors in local markets and are signified by the addition of an identifier
for the country concerned, such as 'AAA(tun)' for National ratings in Tunisia.
Specific letter grades are not therefore internationally comparable.

Applicable Criteria and Related Research:
Recovery Ratings for Financial Institutions
Global Financial Institutions Rating Criteria
Finance and Leasing Companies Criteria
Evaluating Corporate Governance
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