Fitch ratings boost to Dubai group
Dubai, January 25, 2012
Fitch Ratings has revised the outlook on Dubai Holding Commercial Operations Group (DHCOG) to stable from negative and affirmed its long-term Issuer Default Rating (IDR) and senior unsecured rating at 'B'.
Fitch has also affirmed DHCOG's Short-term IDR at 'B' and Recovery Rating (RR) of 'RR4', which represents Fitch's RR cap for the UAE.
The rating action also affects Dubai Holding Commercial Operations Group's medium-term notes (MTN) senior unsecured rating, said a company statement.
The outlook revision reflects the company's good progress with its non-core asset disposal programme and better than expected operating performance in the hospitality and rentals divisions and reduced leverage.
Additionally, with the repayment of $240 million in last July and $500 million in the upcoming month, DHCOG has no significant maturities before 2014 as the Dubai group's debt maturity profile leave some breathing space.
'DHCOG's current ratings are dependent on execution of targeted non-core asset disposals rather than FCF generation,' remarked Bashar Al Natoor, director in Fitch's EMEA corporates team in Dubai.
'The disposal of non-core assets, mainly for Dubai Property Group, and the unwinding of its investments will give DHCOG the necessary financial flexibility to cope with the difficult real estate market in Dubai,' he added.-TradeArabia News Service