Abu Dhabi Companies May Need Help to Service Debt, Fitch Says

Abu Dhabi’s state-linked companies may need government help to service their debt as they borrowed $18 billion from global capital markets to fund their expansion and acquisitions, Fitch Ratings said in a report today.

“State-owned companies are borrowing to support acquisitions and the strategic development plans of Abu Dhabi,” Charles Seville, associate director in the sovereign group at Fitch, wrote in a report today that affirmed the emirate’s ‘AA’ rating with a stable outlook. “With a variety of quasi- sovereign entities borrowing, the risk grows that one may eventually have to call upon the sovereign to help it service debts.”

Abu Dhabi’s government and its state-affiliated firms are leading a borrowing surge from the Gulf region this year. Tourism Development & Investment Co., a state-owned developer of hotels, may raise $1 billion in an Islamic bond offer, following recent state bond sales from Mubadala Development Co. and Aldar Properties PJSC.