Fitch Ratings has placed Eqdom's National Long-Term Rating of 'AA+(mar)' and National Short-Term Rating of 'F1+(mar)' on Rating Watch Negative (RWN).

The RWN follows the announcement by France's Societe Generale S.A. (SG; A-/Positive) of the sale of its 57.7% stake in Societe Generale Marocaine de Banques (SGMB; 'AAA(mar)'/RWN) and its subsidiaries to Moroccan-based Saham Group (unrated) for EUR745 million. Saham Group will take over all the activities operated by these companies as well as all client portfolio and employees.

The sale is subject to regulatory approvals including from Morocco's Central Bank (Bank-Al Maghrib), the Competition Authority and the Moroccan Authority for Capital Markets. The sale is expected to be concluded by end-2024. After the sale is completed, Saham Group will launch a public takeover of SGMB's shares in Eqdom as the company is listed in the Casablanca Stock Exchange.

The RWN on Eqdom's National Ratings reflects Fitch's expectation that upon completion of the sale the agency will cease to factor in SG's support in SGMB's ratings, which would result in a downgrade of SGMB's National Ratings and consequently of Eqdom's National Ratings. We expect to continue to maintain a notch difference between SGMB's National Ratings and Eqdom's.

We will resolve the RWN once the transaction is concluded and we have a clear view of the company's financial, business and risk profile after the sale.

Key Rating Drivers

Eqdom's ratings are based on potential support from SGMB and currently ultimately SG. SGMB uses Eqdom as its centralised consumer finance platform in Morocco. Fitch believes Eqdom plays an important but not core role for SGMB, which has a high influence on our assessment of support probability for Eqdom. This is reflected in Eqdom's rating being notched down only once from SGMB's National Long-Term Rating.

Eqdom's Standalone Credit Profile is below the company's support-driven credit profile.

The Key Rating drivers are as outlined in the rating action commentary published on 2 February 2024 on www.fitchratings.com.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Eqdom National Ratings could be downgraded if SGMB's National Ratings are downgraded after the transaction execution.

If the transaction fails to close, we could affirm Eqdom's ratings if SGMB's ratings remain at their current levels.

Eqdom's ratings could also be downgraded if Fitch takes the view that Eqdom's role for, relevance to, and integration with SGMB have diminished.

The resolution of the RWN could extend beyond the typical six months if the transaction is not completed by the end of it.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

An upgrade of Eqdom's National Ratings is unlikely given the RWN.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

Eqdom's ratings are linked to the ratings of its parent, SGMB.

(C) 2024 Electronic News Publishing, source ENP Newswire