Archive:

Newsletter signup





March 5th, 2010
Moody's downgrades seven UAE firms

Moody's downgrades seven UAE firms: RTE Business 04.03.10

Moody's financial ratings service has downgraded the ratings for seven government-owned firms in the United Arab Emirates, including investment company Mubadala. Moody's said its rating for Abu Dhabi-owned Mubadala, which manages a portfolio of billions of dollars of investments in energy, industry, health, infrastructure and real estate, had been downgraded from Aaa2 to Aaa3. Moody's also downgraded the ratings for Abu Dhabi-owned International Petroleum Investment Company from Aa2 to Aa3 and the Tourism Development and Investment Company from Aa2 to A1.

Explaining the three downgrades, it said: 'Moody's has decided to introduce a moderate distinction between their ratings and that of the sovereign funds as there is no 'explicit formal agreement' that the government will support them. The Abu Dhabi National Energy Co was downgraded from Aa2 to A3, as 'the government level of support factored into its ratings was lowered' due to the company's 'increasing commercial orientation' and 'lack of ongoing and regular' government funding.


Dolphin Energy, which transports gas from Qatar to the UAE, was downgraded from Aa3 to A1, reflecting the 'company's commercial... business activities,' Moody's said. And UAE national telecommunications company Etisalat's rating was lowered from Aa2 to Aa3, as support from the federal government factored into its rating was reduced from 'high to medium,' it said. The outlook for those companies is stable, Moody's said.

At the end of November, Moody's downgraded the ratings of six companies owned by the Dubai government in the wake of the emirate's November 25 announcement that it was seeking a six-month debt freeze for its Dubai World conglomerate. Dubai's total debt is estimated at between $80 and $100 billion, but some experts say it could be as high as $170 billion.