Although the Dubai economy is beginning to bounce back, rated Dubai government-related entities are up against significant risks, said Standard & Poor's Ratings Services in a report, "Dubai Government-Related Entities Face Debt Maturities And Refinancing Issues In 2012," published today on RatingsDirect on the Global Credit Portal.
"Risks linked to the weakening global economic outlook, the Arab Spring, and volatile equity and bond markets have raised concerns as Dubai GREs face large debt maturities and refinancing needs next year," said Standard & Poor's credit analyst Tommy Trask.
Standard & Poor's rates five Dubai-based companies that it considers to be GREs under its criteria: Dubai Electricity and Water Authority, DP World Ltd. ,Emaar Properties PJSC, DIFC Investments LLC, and Jebel Ali Free Zone (FZE). In our ratings, we factor in our view of the likelihood and extent of any extraordinary support that the Dubai government would provide to these GREs in the event of their financial distress. The results range from no uplift for DP World and Emaar to three notches of uplift for DEWA and DIFC Investments (see table).
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