OREANDA-NEWS. Fitch Ratings has placed El Wifack's (EWL) National Ratings on Rating Watch Positive, following the announcement of a strategic partnership with the Islamic Corporation for the Development of the Private Sector (ICD, rated AA/F1+/Stable).

Under the terms of the agreement signed in March 2015, ICD will become the largest shareholder with an expected 30% stake in EWL. The increase in capital is expected to occur in June-July 2015, bringing the total capital up to TND150m. ICD will also provide the leasing company with technical assistance to facilitate its conversion into a universal Islamic bank.

Fitch will resolve the RWP once ICD's equity stake purchase is completed, which is likely to be by 3Q15.

KEY RATING DRIVERS AND SENSITIVITIES- NATIONAL RATINGS AND SENIOR DEBT

EWL's National Ratings are currently based on its standalone creditworthiness. The National Ratings reflect EWL's consistently lower risk profile compared with peers in managing asset quality and liquidity and its adequate capital ratios. Fitch views EWL's liquidity management as fairly prudent, enhanced by potential ordinary support from its bank shareholder, Societe Tunisienne de Banque.

As mentioned in our recent commentary (See "Fitch upgrades 1 Tunisian Leasing Company; Affirms 7 Others", dated 30 January 2015 at fitchratings.com), EWL's National Ratings would be upgraded if a large international strategic partner steps in as a strong shareholder. Once ICD owns the strong equity stake in the leasing company, EWL's ratings will become driven by ICD's institutional support rather than by EWL's own standalone risk profile.

Fitch believes that the ability of support from ICD would be high given its strong creditworthiness as indicated by its 'AA' IDR although propensity to do so may be more limited given EWL's limited strategic importance. Fitch expects ICD's significant equity stake in EWL to result in a multi-notch upgrade of the leasing company.

The rating actions are as follows:

El Wifack Leasing

National Long-term Rating: 'BBB-(tun)'; placed on RWP
National Short-term Rating: 'F3(tun)', placed on RWP
National senior unsecured debt rating: 'BBB-(tun)', placed on RWP.