“Standard & Poor’s" affirms Dhaman’s rating at A+ with a stable outlook

Standard & Poor's (S&P), a leading world rating agency, affirmed its long-term credit rating and financial strength rating of the Arab Investment and Export Credit Guarantee Corporation (Dhaman) at A+ with a stable outlook. Standard & Poor’s continues to base its ratings on Dhaman’s very strong financial risk profile, underpinned by its robust capital adequacy and exceptional liquidity. The corporation's liquidity remains a key strength, supported by a conservative investment portfolio mainly composed of fixed-income instruments. The agency added that despite ongoing high operating risks in several member countries, Dhaman’s shareholder base has remained stable and supportive, demonstrating continued confidence in the Corporation. S&P forecasts that Dhaman’s risk-based capital adequacy will remain redundant at the 99.99% confidence level over the next two years. Dhaman’s investment guarantee line has achieved a significant turnaround as the gross insured business in this line rebounded to USD 650 million in 2024, notably supported by a USD 500 million non-honoring of sovereign financial obligation insurance policy issued in 2023. This landmark transaction provided credit enhancement for an international loan extended to a member country government by two private banks, supporting health and educational projects. It was the first-of-its-kind deal for the member country to benefit from this multilateral credit enhancement. Two additional large investment guarantee deals are expected to be finalized in 2025, which could strengthen Dhaman’s business volumes in the medium term. Despite the operational challenges facing Dhaman in certain geographies and increasing competition from private insurers and other development agencies, it remains focused on diversifying its business. The corporation has successfully reduced its hydrocarbon exposure from 30% historically to 16% in 2024 by shifting toward other sectors such as grains, edible oils, and basic strategic development materials. Dhaman’s leadership continues to implement its 2022–2026 strategic plan, focusing on enhancing its development role and expanding its investment guarantee business. The plan includes refining Dhaman’s vision and mission, reassessing its risk appetite, developing new markets and products, and upgrading systems and risk management processes.