Riyadh - Mubasher: Moody's Investors Service has maintained the long- and short-term issuer ratings of Saudi Real Estate Refinance Company (SRC) at 'A2/P-1' and changed the outlook to positive from stable.

Moody's also kept the 'Aa2.sa/SA-1' long- and short-term national scale issuer ratings, according to a recent press release.

This was mainly driven by Moody's affirmation of the 'A1' issuer rating for the Public Investment Fund (PIF), the parent and support provider of Saudi Real Estate Refinance.

The rating highlighted the company's solid asset quality and strong cap, which are backed by a still-evolving profitability profile, high reliance on wholesale funding, and concentrated exposure to the relatively new mortgage market in the Kingdom.

Meanwhile, the positive outlook reflects the PIF’s potentially stronger capacity to support the Saudi company at times of stress. It also indicates that a downgrade in the near term is less likely to happen.

Nonetheless, downward pressure on the company's ratings could develop through severe losses on its mortgage portfolio that erode a significant portion of its capital, which will heighten liquidity and market risks. 

The rating agency noted that the ratings could be upgraded if PIF's ability to anchor Saudi Real Estate Refinance further improves.