Moody's assigns stable rating outlook to DIFC Investments

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DIFC Investments (DIFCI) has been given a long-term issuer rating of Baa3 by investor service Moody’s, with a stable rating outlook.

The company’s rating is supported by a good base of recurring income, derived from its investment properties and its low senior leverage, Moody’s said.

“This partially offsets the company's asset and geographic concentration as well as the negative trends on rent and letting activity for the office and retail markets in Dubai,” said Lahlou Meksaoui, a Moody’s Lead Analyst.

“DIFCI plays an important role in the development of DIFC as a financial free zone and an international financial hub, supporting the government's initiative of diversifying and strengthening Dubai's economy,” Meksaoui added.

DIFCI, which is the investment arm of Dubai International Financial Centre (DIFC) is a government-related issuer, as it is 100 percent owned by the DIFC Authority.

“DIFCI's issuer rating of Baa3 combines a Baseline Credit Assessment (BCA) of baa3 with a high level of dependence with and strong level of support from the government of Dubai,” Moody’s rating action statement said.

The assessment is supported by a high-quality office retail portfolio, a high occupancy rate track record, and a strong tenant base, including international financial institutions which have been operating DIFC for several years.

Other supporting factors include the recurring nature of stable rental income, additional revenues generated by registration rights and fees paid by companies to operate in the DIFC, low senior leverage and strong interest coverage ratio, strong liquidity with no debt maturing until 2024 and a property portfolio which is fully unencumbered, Moody’s said.

(Writing by Imogen Lillywhite; editing by Mily Chakrabarty)

( imogen.lillywhite@refinitiv.com )

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