Abu Dhabi's ADQ gets Aa2 rating with stable outlook

Investment vehicle intrinsically linked to AD government, says Moody's

  
General view of Abu Dhabi, United Arab Emirates, January 3, 2019. Image used for illustrative purpose.

General view of Abu Dhabi, United Arab Emirates, January 3, 2019. Image used for illustrative purpose.

REUTERS/ Hamad I Mohammed

Moody's Investors Service assigned a long-term issuer rating of Aa2 for Abu Dhabi Developmental Holding Company (ADQ), with a stable outlook, on par with the Government of Abu Dhabi. 

ADQ, formerly known as Abu Dhabi Development Holding, was set up in 2018 and owns some of Abu Dhabi's national champions such as TAQA and SENAAT.

In addition, it owns Abu Dhabi Ports, Abu Dhabi Airport and bourse operator ADX.

In all, it has direct and indirect investments in over 90 operating entities across sectors, including energy & utilities, food & agriculture, healthcare & pharma, and mobility & logistics.

"The Aa2 issuer rating and stable outlook are aligned with those of the Government of Abu Dhabi because we believe ADQ is intrinsically linked to the Government of Abu Dhabi by virtue of being a wholly owned entity and a vehicle of public policy" says Julien Haddad, a senior analyst at Moody’s said in a report.

Moody's classifies ADQ as a Government Related Issuer (GRI) and bases the rating on the ability and willingness of the Government of Abu Dhabi to provide timely financial support to ADQ.

“ADQ's standalone credit quality benefits from (1) large scale with a portfolio of over 90 operating entities; (2) investments in assets with a market leading position in Abu Dhabi such as TAQA and Abu Dhabi Ports; and (3) good liquidity at the holding level,” the report said.

It said ADQ’s liquidity is bolstered by dividends received from its operating subsidiaries and investments, with TAQA being the main dividend contributor to the group in 2020.

(Writing by Brinda Darasha; editing by Daniel Luiz)

brinda.darasha@refinitiv.com

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