Moody's Investors Service has today downgraded to B3 from B2 the notes issued by Dubai Holding Commercial Operations MTN Ltd. under its Medium Term Note (MTN) programme. The Probability of Default Rating (PDR) of Dubai Holding Commercial Operations Group LLC (DHCOG) was left unchanged at B3, Global Arab Network reports according to a press statement. Moody's is maintaining its review for possible downgrade of the company's B2 Corporate Family Rating (CFR) as well as the MTN ratings and the PDR.
Today's rating action follows the statement by DHCOG on 30 December 2010 that it has reached an agreement with its banks for the USD555 million revolving credit facility (unrated). "Despite the limited information so far regarding the new terms, Moody's believes that the banks may now be in a preferential position vis-a-vis bondholders," says Martin Kohlhase, AVP-Analyst at Moody's in Dubai. "Moody's has accordingly reflected this by downgrading the debt instruments' ratings to B3," Mr. Kohlhase adds.
Moody's is maintaining the PDR at the B3 level to indicate the continued high default risk until the capital market debt is refinanced over the next 14 months when the following MTNs mature: CHF250 million (ca. USD240 million; July 2011) and USD500 million (February 2012).
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