Reuters
(The following statement was released by the rating agency) PARIS, October 31 (Fitch) Fitch Ratings has affirmed Attijari Monetaire Jour’s (ATTIJMJ) and CDM Securite Plus’s (CDMSP) National Money Market Fund Ratings at ‘AAAmmf(mar)’. Both money market funds are domiciled in Morocco and managed by Wafa Gestion (Highest Standards(mar)).
The main drivers of the rating affirmation are: — the portfolios’ overall credit quality and diversification; — the short portfolio maturity, with minimal exposure to interest rate and spread risks; — the holding of daily and weekly liquid assets, consistent with shareholder profile and concentration; and — the capabilities and resources of Wafa Gestion as investment manager. KEY RATING DRIVERS Portfolio Credit Quality/Diversification Both funds invest in securities issued by the Kingdom of Morocco or other Moroccan rated issuers of high credit quality, and in repurchase agreements (repos) backed by government bonds. The funds have recourse to overnight (or callable overnight) inter-fund repos with other funds managed by Wafa Gestion or, in exceptional cases, other pre-approved Moroccan asset managers (20% maximum exposure per fund). Such inter-fund repos are collateralised by the Moroccan government securities or with government-guaranteed bonds. As of 30 September 2016 inter-fund repos of ATTIJMJ and CDMSP represented 74% and 57% respectively, which Fitch views as high. As of 30 September 2016, ATTIJMJ and CDMSP were invested 14% and 25% respectively in government assets. On several occasions between November 2015 and April 2016, ATTIJMJ’s total exposure to AttijariWafa Bank (AA-(mar)/Stable/F1+(mar)) temporarily exceeded Fitch’s 15% direct single ‘F1+(mar)’ concentration guidelines. This had resulted from substantial and volatile in- and out-flows during the period. Actions since taken by Wafa Gestion to stabilise and better anticipate investor flows have enabled the fund to fully comply with Fitch’s diversification criteria. Maturity Profile Interest rate risk is contained by the portfolios’ weighted average maturity (WAM) of below three months, as per Fitch ‘AAAmmf(mar)’ guidelines. At 30 September 2016, the WAMs of ATTIJMJ and CDMSP were below seven days. Individual asset maturity is limited to one year. Liquidity Profile The funds maintain a high allocation to liquid assets, with typically more than one quarter of the portfolio in repos overnight (or callable overnight). The largest investor in the funds represented 35% (ATTIJMJ) and 29% (CDMSP) respectively, as of 30 September 2016. Fund Objectives The objective of the funds is to preserve capital and provide liquidity. The funds pursue their investment objectives by investing in high-quality money market instruments and short-term debt, including time deposits, certificates of deposit, sovereign bonds and notes, and repos. Investment Advisor Incorporated in 1995, Wafa Gestion is the asset management arm of AttijariWafa Bank, its main shareholder (66% of capital). The remainder is held by French asset manager, Amundi (A+/Stable/F1). As of end-September 2016, Wafa Gestion’s assets under management (AUM) stood at MAD92bn (EUR8.5bn), ATTIJMJ and CDMSP had MAD840m and MAD305m of assets, respectively. RATING SENSITIVITIES The ratings may be sensitive to material changes in the credit quality, market risk, or liquidity profiles of the funds. Temporary changes in key portfolio metrics outside of Fitch’s criteria guidelines need not automatically result in rating changes, provided the fund manager is able to address them with credible near-term remedial actions, as was the case in 5M16. However, materially adverse and continued deviations from Fitch’s guidelines for any key rating driver may lead to the rating being placed on RWN or downgraded. A downgrade of the sovereign’s international Long-Term Issuer Default Rating may not necessarily result in a downgrade of either fund’s National Money Market Fund Rating, as it could continue to represent the lowest credit, market and liquidity risk available in Morocco, in line with Fitch’s national scale rating approach. However, this is based on the assumption that liquidity in capital markets will not be structurally impaired to the extent it prevents the funds from meeting Fitch’s national scale rating criteria. The agency monitors the portfolio composition and its compliance with rating criteria using reports and holdings sent on a weekly basis by Wafa Gestion’s risk manager. Contact: Primary Analyst Manuel Arrive, CFA +33 1 44 29 91 77 Fitch France S.A.S. 60 rue de Monceau 75008 Paris Secondary Analyst Patrick Chaussy Analyst +44 20 3530 1803 Committee Chairperson Alastair Sewell, CFA Senior Director +44 20 3530 1147 Media Relations: Rose Millburn, London, Tel: +44 203 530 1741, Email: rose.millburn@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Money Market Fund Rating Criteria (pub. 10 Dec 2015) here National Scale Money Market Fund Rating Criteria (pub. 24 Apr 2015) here Additional Disclosures Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. 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