(The following statement was released by the rating agency)
LONDON/MILAN/PARIS, February 12 (Fitch) Fitch Ratings has
Factoring's (TF) National Long-term rating at 'BBB(tun)' and
Factoring's (UF) National Long-term rating at 'BB(tun)'. The
Outlooks on both
National Long-term ratings are Stable. A full list of ratings
provided at the end of this rating action commentary.
The rating actions follow a periodic review of Tunisian
National Ratings. National Ratings reflect the creditworthiness
of an issuer
relative to the best credit and to peers in the country.
KEY RATING DRIVERS - NATIONAL RATINGS AND SENIOR DEBT
TF's National ratings reflect Fitch's opinion that there is a
probability that TF would receive support, if required, from its
main direct 57%
shareholder, Tunisie Leasing (TL, BBB+(tun)/Stable/F2(tun)).
considers TF as a strategically important subsidiary for TL, the
support being provided is viewed as limited due to TL's moderate
support its factoring company if needed. The Stable Outlook is
in line with that
on TL's National Long-term rating.
Despite a deteriorating Tunisian operating environment, TF has
asset quality ratios. Single debtor concentration risk remains
high but is, to
some extent, mitigated by TF's adequate risk management
procedures and prudent
credit risk approach. Fitch considers TF's capital ratios as
company sustained its profitability in 1H13 and Fitch expects it
to be able to
defend its net interest margins by passing a significant part of
funding costs to customers. Liquidity is inherently tight but
well-managed despite liquidity pressures on the Tunisian
UF's National and senior debt ratings are driven by the
creditworthiness. They reflect weaker asset quality than peers,
and weakened profitability. However, the ratings also factor in
liquidity support made available by UF's bank shareholders in
case of need and
its acceptable capitalisation.
Fitch considers UF's liquidity as tight, given its reliance on
and the absence of contingency funding plans. However, liquidity
risk has so far
been mitigated by support from its bank shareholders, which
more than half of UF's funding at end-1H13.
UF's credit risk has improved since 2009, resulting in lower
impaired loans and
improved asset quality ratios. However, UF's impaired loans
ratios remained weak
at end-1H13 due to legacy exposures (the majority of impaired
loans dated back
to 2008), and coverage ratios were only satisfactory.
Concentration risk per
obligor remains material, a common feature within the factoring
Fitch views UF's capital as only acceptable with a Fitch core
capital ratio of
23.7% at end-1H13) given low asset quality and concentration
UF's shareholding structure is fragmented and as a result,
cannot be relied upon, in Fitch's view. The bulk of UF's capital
directly and indirectly by three domestic banks: Arab Tunisian
'BB'/Negative) 22.2%, Banque Nationale Agricole (12.5%) and Amen
RATING SENSITIVITIES - NATIONAL RATINGS AND SENIOR DEBT
TF's National ratings are mostly sensitive to changes to TL's
Nevertheless, they could also suffer from a material
deterioration of TL's
propensity to support TF, or benefit from a strong increase in
TL's stake in TF.
UF's National ratings and senior debt ratings could benefit from
improvements in asset quality as well as from improved credit
and liquidity risk
management. A strong increase in ATB's stake in UF could result
in an upgrade of
UF's ratings. Downside risk for ratings could result from a
deterioration in asset quality and/or capital ratios.
The rating actions are as follows:
National Long-term rating: affirmed at 'BBB(tun)'; Outlook
National Short-term rating: affirmed at 'F3(tun)'
National Long-term rating: affirmed at 'BB(tun)'; Outlook Stable
National Short-term rating: affirmed at 'B(tun)'
National senior unsecured debt rating: affirmed at 'BB(tun)'
+ 33 1 44 29 91 42
Fitch France S.A.S.
60 Rue de Monceau
75 008 Paris
+ 44 20 3530 1126
+ 39 02879087225
Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153,
Additional information is available on www.fitchratings.com
Applicable criteria, â€˜Global Financial Institutions Rating
Criteriaâ€™, dated 31
January 2014, 'Rating FI Subsidiaries and Holding Companies',
dated 10 August
2012, â€˜Finance and Leasing Companies Criteriaâ€™ dated 11
'Evaluating Corporate Governance' dated 12 December 2012 and
Ratings', dated 30 October 2013 are available at
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Finance and Leasing Companies Criteria
National Scale Ratings Criteria
Evaluating Corporate Governance
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PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS
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