More NewsDubai Entities to Remain Unaffected by Dubai World, Nakheel Restructuring

Dubai Entities to Remain Unaffected by Dubai World, Nakheel Restructuring

Fitch Ratings has reiterated that developments surrounding state support for Dubai-based entities following Dubai World’s and Nakheel’s proposed restructuring announcement of their liabilities, do not impact the agency’s assessment on sovereign support, or expectations of support, when assigning corporate bond ratings for state-owned enterprises (SOE) in GCC countries.

“Ratings have been impacted when Fitch assessed that either the willingness or the ability of the sovereign to provide support have been impaired,” said Bashar Al Natoor, director in Fitch’s industrial team. “However, when this is not the case, ratings have been affirmed at the previous level as per Fitch’s Parent-Subsidiary Linkage methodology, which remains unchanged.”

Fitch notes that the Government of Dubai support is ultimately intended to serve the future growth of the Emirate of Dubai and the wider UAE economy. However, today’s statement reiterated that “loans to GREs – unless specifically guaranteed by the government – are based on the credit risk of individual GREs”. Moreover, of the approximately US$9bn in new funding that would be made available to Dubai World and Nakheel, only about US$4bn will come from Dubai’s internal resources, split over the next three years. This suggests that Dubai’s direct ability to provide additional support remains relatively limited.

Related Articles

Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

3m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

4m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

4m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

4m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

4m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

4m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

5m Tasja Botha
FX for corporates: 5 best practices for treasurers

Economy FX for corporates: 5 best practices for treasurers

5m Mateo Graziosi