S&P Global Ratings has affirmed its 'AA' long-term and 'A-1+' short term foreign and local currency sovereign credit ratings on the Emirate of Abu Dhabi, a member of the United Arab Emirates (UAE). The outlook is stable.
“At the same time, we affirmed our 'AA' long-term foreign currency issue rating on the sovereign-guaranteed bond of senior unsecured debt issued by Waha Aerospace BV,” said the ratings agency.
“The stable outlook on Abu Dhabi reflects our expectation that economic growth will gradually pick up and its fiscal position will remain extremely strong over the next two years, although structural and institutional weaknesses will likely persist,” said S&P Global Ratings.
“We could consider raising our ratings on Abu Dhabi if we observed pronounced improvements in data transparency, including on fiscal assets and external data, alongside further progress in institutional reforms. Moreover, measures to improve the effectiveness of monetary policy, such as developing domestic capital markets, could be positive for the ratings over time.
“We could consider a negative rating action if we expected a material deterioration in Abu Dhabi's currently very strong fiscal balance sheet and net external asset position. If fiscal deficits or the materialization of contingent liabilities led to a drop in liquid assets to below 100 per cent of GDP, pressure on the ratings would develop. A downward rating action could also follow domestic or regional events that compromised political and economic stability in Abu Dhabi,” it added. – TradeArabia News Service
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