The Inter-Arab Ratings Company (IARC) is set to join the Middle East ratings business at the start of next year when its North African subsidiary, Maghreb Ratings, issues its first debt rating.
Maghreb Ratings has just opened its office in Tunis after getting a licence in August and should issue its first rating for a Tunisian corporate borrower in January. IARC plans to start opening more subsidiaries in the Middle East from the first quarter of 1997, chief executive Hazim al-Dalli says.
IARC, which is registered in Bahrain, is a joint venture set up by the Arab Monetary Fund, the International Finance Corporation and European ratings agency IBCA. Its task is to set up local offices around the Middle East which will provide ratings for banks or companies that want to issue bonds in their domestic markets. IBCA is providing initial technical assistance and could help to provide an international rating if needed (MEED 16:8:96).
During this year, international ratings agencies have expanded their coverage of the Middle East in response to growing interest in the region from outside. To date, the ratings have been on the credit standing of states and banks. Outside North Africa, Middle East corporates rarely issue bonds and the legal infrastructure to do so is relatively undeveloped in many places.
Al-Dalli says IARC is hoping to open a company in Egypt in the first three months of 1997, to be called Nile Ratings. 'During the first quarter of 1997 we will decide on the location of subsidiaries in the Gulf and Levant.' In the Levant, the location could be either Lebanon or Jordan, or both if there is enough demand. In the Gulf, the first likely candidates are Bahrain and Oman. The UAE is another possibility, though the lack of a formal stock exchange means that this could take longer.
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