Jan 27 2012
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Rating agencies raise Dubai Holding ratings
Friday, Jan 27, 2012
Moody’s Investors Service yesterday affirmed DHCOG Corporate Family Rating (CFR) at B2 and upgraded its Probability of Default Rating (PDR) and the ratings for multi-currency debt instruments issued by Dubai Holding Commercial Operations MTN Limited to B2.
Late last year, rating agency Moody’s had warned that three Dubai government-related entiries (GREs) such as DHCOG was likely to face refinancing risks. DHCOG had responded by saying that it would meet its debt obligations and repay the maturing debt.
“The rating upgrades and affirmation result from the combination of the credit positive implications of the upcoming bond repayment on DHCOG’s liquidity profile and DHCOG’s updated business plan in the context of the ongoing implementation of its revised strategy,” Moody’s said.
On Wednesday, Fitch revised the outlook on DHCOG to stable from negative and affirmed its Long-term Issuer Default Rating (IDR) and senior unsecured rating at ‘B’.
“The outlook revision reflects the company’s good progress with its non-core asset disposal programme and better-than-expected operating performance in the hospitality and rentals divisions and reduced leverage,” said says Bashar Al Natoor, Director in Fitch’s Emea Corporates team in Dubai. Analysts said the disposal of non-core assets combined with a rebalancing Dubai Property Group’s portfolio towards build to rent vs build to sell would generate stable cash flows by increasing the rental income capacity. Additionally strong cash flow from some of its business divisions is expected to help the company to manage its obligations better.
By Babu Das Augustine?Deputy Business Editor
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