Tuesday, Dec 06, 2011
DUBAI (Zawya Dow Jones)--Ratings agency Moody's Investor Service has warned that three Dubai government-related entities that have debt worth $3.8 billion due in 2012 may face refinancing risks, and raised wider concerns the emirate's potential need for further financial support in the absence of capital-raising measures.
Moody's, in a report published Tuesday, said Dubai Holding Commercial Operations Group, Jebel Ali Free Zone and DIFC Investments were all facing refinancing risks and may experience ratings volatility as they move closer to next year's debt maturity dates.
"The refinancing risk affecting DHCOG, DIFCI and JAFZ is exacerbated by the fact that they entered the crisis with weak liquidity profiles and their reliance on what turned out to be weaker than anticipated growth trajectories for some business segments, which determined their ability to service their short to medium-term debt maturities," Moody's said.
Despite Dubai's ability to repay, refinance and restructure its debt since 2009, with financial assistance from Abu Dhabi, Moody's said it had so far seen "few signs of material voluntary deleveraging."
"This raises concerns about renewed medium-term pressures when the refinanced obligations become due, and about Dubai's potential need for further financial support in the absence of capital-raising measures," Moody's said.
Dubai in total holds around $101.5 billion of debt linked to the Dubai government and its state-owned non-financial corporates, according to the report.
-By Nicolas Parasie, Dow Jones Newswires; +9714 446-1681; nicolas.parasie@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
06-12-11 0618GMT
