Fitch Ratings has affirmed Abu Dhabi's Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'AA' with a Stable Outlook. Fitch has also affirmed Abu Dhabi's Short-term foreign currency IDR at 'F1+'. The UAE Country Ceiling is affirmed at 'AA+'.
"The affirmation and Stable Outlook reflect the continuing strength of Abu Dhabi's sovereign balance sheet, which conveys exceptional fiscal flexibility," says Richard Fox, Head of Middle East and Africa Sovereigns at Fitch. "The 2008-2009 global financial crisis was a severe stress test for Abu Dhabi, but one which left its balance sheet largely undented. Any future stress would have to have harsher consequences than this to trigger negative rating action," Fox added.
Abu Dhabi's rating is anchored by one of the strongest balance sheets of any rated country. Foreign assets, including equity investments, are estimated by Fitch at approaching $300 billion, with just $4bn of direct sovereign external debt. Sovereign net foreign assets of an estimated 167 per cent of GDP are therefore second only to Kuwait. Fitch estimates gross sovereign financial assets by the end of 2011 will be 16 per cent higher than their end-2007 level, having dipped only slightly in 2008. At current oil prices, they are forecast to rise steadily, propelled by investment returns and overall fiscal surpluses.
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