Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations.

Scope performs monitoring reviews to determine whether material changes and/or changes in macroeconomic or financial market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit ratings’ performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for INDIS Malta’s long and short-term issuer and senior unsecured local and foreign-currency ratings (A+/Stable; S-1+/Stable) on 10 November 2023.

This monitoring note does not constitute a credit rating action, nor does it indicate the likelihood that Scope will conduct a credit rating action in the short term. Information about the latest credit rating action connected with this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

INDIS Malta’s A+ ratings are anchored by the outstanding explicit government guarantees for the vast majority (87%) of its debt provided by the Republic of Malta (A+/Stable), granting creditors a direct claim against the state in case of financial difficulties. In addition, close ties to the state due to strong government control over INDIS Malta’s activities, strategic direction, and governance as well as the entity’s strategic importance to the government which underpins the likelihood of exceptional support being provided if needed.

INDIS Malta’s stand-alone fundamentals reflect its policy mandate. The entity benefits from its quasi-monopolistic position as the sole administrator of government-owned industrial land. This supports INDIS Malta’s dominant market position and its stable profitability. However, limited geographical and tenant diversification, exposure to cyclical industrial sectors – all a reflection of its public policy mandate – and elevated debt amid rising development costs and higher interest rates are challenges.

The Stable Outlook reflects Scope’s view that risks to the ratings are balanced.

The ratings could be upgraded if the sovereign rating of the Republic of Malta were to be upgraded, further bolstering its capacity to provide support to INDIS Malta.

The ratings could be downgraded in the event of: i) a downgrade of the Republic of Malta’s sovereign ratings; ii) changes in the institutional framework, notably weakening operational and financial linkages with the sovereign; iii) a substantial increase in non-guaranteed debt; and/or iv) a material weakening in the entity’s business or financial risk profile and/or governance quality.
 
The methodology applicable for the reviewed ratings and rating Outlooks (Government Related Entities Rating Methodology, 13 July 2023) is available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst Thibault Vasse, Associate Director
 
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