International rating agency Fitch Ratings has assigned Tunisie Factoring (TF) a support rating of 5. At the same time, Maghreb Rating, Fitch's Tunisian affiliate, has affirmed the long- and short-term national ratings of Tunisie Factoring at BBB(tun) and F3(tun), respectively. The outlook for the long-term rating is stable.
TF is 54.5 percent controlled by Tunisia's leading leasing company, Tunisie Leasing (TL), and 27.3 percent by TL's fund management division. The balance is held by France's Eurofactor (9.1 percent) and a Tunisian private company. TF dominates the local factoring market with 70 percent share of domestic factoring and 100 percent of export factoring.
While Fitch has received written confirmation from TL regarding its propensity to support TF, the agency noted that TL's liquidity position is tight. In Fitch's opinion, were TF to run into difficulties, support from its shareholders, though possible, cannot be relied upon.
TF has proven its ability to produce sound results even in a deteriorating operating environment. Management's strong know-how, a client information database including historic credit information, plus efficient operational systems, essential given the fragmented nature of the factoring business, have combined to produce sound asset quality and high profitability.
Credit models and procedures appear efficient, judging by the low levels of impaired lending (impaired invoices/gross invoices: 5.14 percent at year-end 02). Reserve ratios are high (96.3 percent at year-end 02).
Short-term local bank revolving lines, some of which are confirmed, represent the backbone of the company's funding. TF's sources of funding have also recently been diversified through the use of the local bond market.
Liquidity ratios for 2002 have thus improved but remain tight, typical of Tunisia's financial sector. Multilateral bank credit lines will be in place by end-2003. Exposure to interest rate risk is low and maturity mismatches are minimal.
Maghreb Rating stated it draws some comfort from the fact that the capital ratio remains well above the eight percent minimum regulatory requirement. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
