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Fitch, S&P cut more Dubai unit ratings to junk
Credit: Reuters
NEW YORK |
NEW YORK (Reuters) - Rating agencies lowered several more Dubai-related entities to junk on Wednesday, over concerns the government will not back Dubai World and its debt obligations.
Fitch Ratings on Wednesday lowered its long-term issuer default rating and senior unsecured rating for Dubai Holding Commercial Operations Group to junk, due to concern about government support for its debt.
Fitch cut Dubai Holding's ratings to BB, two levels below investment grade, from BBB-minus, the lowest investment-grade rating, for both its IDR and senior unsecured debt.
"Today's rating action reflects a further review of the level of government support for financial obligations of DHCOG," Fitch said in a statement. "Fitch's action today reflects a continuing lack of substantive information to support continued equalization of ratings with Fitch's view of Dubai's sovereign creditworthiness."
Dubai, the commercial capital and one of the seven emirates that make up the United Arab Emirates federation, has been rocked by the crisis at Dubai World. The government-owned investment vehicle announced late on Monday it will meet with creditors to delay payment on $26 billion in debt.
Meanwhile, the International Monetary Fund expects to cut its 2010 growth forecast for the United Arab Emirates because of fallout from the Dubai debt crisis, a senior IMF official said on Wednesday.
Standard & Poor's followed with rating cuts on six Dubai government related entities, or GREs, including five that were cut to junk.
S&P also cut four Dubai-based banks and said more cuts may come.
S&P cut Emirates Bank International PJSC, the National Bank of Dubai and Mashreqbank to BBB, the second lowest investment grade rating, from A-minus, two levels higher.
The rating firm also cut its long- and short-term counterparty credit ratings on Dubai Islamic Bank by two notches to BBB-minus, the lowest investment-grade rating.
(For more news on Reuters Money visit www.reutersmoney.in)
(For other stories from the Dubai Debt Crisis, click here)
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