Apr 16 2010 |
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Fitch affirms BBB+ rating for Alaqaria's IDR
DOHA: Fitch Ratings yesterday affirmed Qatar Real Estate Investment Company QSC's (Alaqaria) Long-term Issuer Default rating (IDR) and senior unsecured rating at 'BBB+', and its Short-term IDR at 'F2'. The IDR and senior unsecured were removed from Rating Watch Positive (RWP). The Outlook is Stable.The senior unsecured rating of Qatar Alaqaria Sukuk Company ( QREIC )'s $ 300m sukuk bonds (due 2012) has also been affirmed at 'BBB+', and removed from RWP.
Fitch resolved the RWP upon receiving clarification regarding final terms and conditions of Barwa Real Estate Company Q.S.C (Barwa) tender offer for the acquisition of the entire share capital of Alaqaria .
Fitch also notes that this transaction will not result in a requirement to prepay Alaqaria/ QREIC debt facilities (including the $ 300m outstanding trust certificates) as confirmed by Alaqaria senior management.
Fitch does not currently factor in any additional credit benefit of the acquisition that could in the future improve Alaqaria 's access to support, that may provide Alaqaria with greater financing flexibility, through equity-raising, parent loans, and other forms of support in time of need.
The ratings continue to reflect Alaqaria 's strong business model driven by a robust profile, and above-average lease duration for the region. Finance leases provide stable, long-term rental income which are underpinned by off-take arrangements with Qatar Petroleum (QP) and government-related entities (of typically between 10 and 15 years' duration), and operational lease agreements with QP-related companies that are between five and 25 years.
However, despite these benefits, Fitch notes that with most of its contracts relating to QP, Alaqaria faces a high level of customer concentration.
© The Peninsula 2010
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