Thursday 11 June 2009

Nakheel Bond ‘Litmus Test’ for Moody’s Dubai Ratings

Nakheel PJSC, which has to repay a $3.5 billion Islamic bond in December, will be a “litmus test” for the six Dubai-owned companies assessed by Moody’s Investors Services Inc., the ratings company said.

“What happens at Nakheel will affect the six ratings that we have for Dubai,” Philipp Lotter, a Dubai-based analyst at Moody’s, which does not have a rating for Nakheel, said at a conference in the sheikdom. Nakheel “does not have the stand alone capacity to repay its bond. Our assumption at the moment is that the government will step in.”

Dubai sold $10 billion of five-year bonds in February to the United Arab Emirates central bank, part of a $20 billion medium-term note program, to assist state-owned companies struggling to raise cash during the credit crunch. That money will be used to meet payment shortfalls or repay loans, the government said.

Reblog this post [with Zemanta]

No comments:

Post a Comment