05/10/2007 14:54
Moody's Investors Service has assigned long term foreign and local currency ratings of A1 to KODAP, the semi-governmental organisation responsible for maintaining compulsory strategic reserves of petroleum products in Cyprus. The outlook is Positive. This is the first time that Moody's has assigned ratings to KODAP.
The rating of KODAP is based on the high dependence of Cyprus, reflecting the close relationship between KODAP and the government and high dependence of Cyprus on oil products for its energy needs.
According to Moody’s “KODAP's ratings benefit from high state support assumptions, based on the legal status of KODAP as a "public law entity" with an independent legal personality from the state and acting under commercial law but which can not be privatized under existing legislation”. “The high support assumption also relies upon the strategic importance of KODAP for Cyprus in order to ensure that the country complies with EU legislation in relation to the maintenance of oil products storage and the fact that KODAP is supervised by the government with a majority of state representatives sitting at the board of directors”, it added.
Moody’s supports that KODAP is a non-profit making status based on the collection of subscriptions from its member companies. “Furthermore, KODAP's BCA is in line with the Cyprus Sovereign rating due to the strong relation between KODAP and the Cyprus government”, Moody’s reported.
According to KODAP’s secretary, Giorgos Mitides, the organization requested its rating by Moody’s in order to secure lower interest rate when borrowing.
KODAP has a nine-member Board, three members of which come from oil companies and big consumers, one from EAC, four from the public sector and one independent member, who is also the Chairman. All members except for those from the oil companies and the big consumers are appointed by the Council of Ministers.
The rating of KODAP is based on the high dependence of Cyprus, reflecting the close relationship between KODAP and the government and high dependence of Cyprus on oil products for its energy needs.
According to Moody’s “KODAP's ratings benefit from high state support assumptions, based on the legal status of KODAP as a "public law entity" with an independent legal personality from the state and acting under commercial law but which can not be privatized under existing legislation”. “The high support assumption also relies upon the strategic importance of KODAP for Cyprus in order to ensure that the country complies with EU legislation in relation to the maintenance of oil products storage and the fact that KODAP is supervised by the government with a majority of state representatives sitting at the board of directors”, it added.
Moody’s supports that KODAP is a non-profit making status based on the collection of subscriptions from its member companies. “Furthermore, KODAP's BCA is in line with the Cyprus Sovereign rating due to the strong relation between KODAP and the Cyprus government”, Moody’s reported.
According to KODAP’s secretary, Giorgos Mitides, the organization requested its rating by Moody’s in order to secure lower interest rate when borrowing.
KODAP has a nine-member Board, three members of which come from oil companies and big consumers, one from EAC, four from the public sector and one independent member, who is also the Chairman. All members except for those from the oil companies and the big consumers are appointed by the Council of Ministers.
Related Articles
