Dubai developer's credit rating is downgraded one notch by investor's service
Emaar’s credit rating has been downgraded by investors’ service Moody’s. Fellow Dubai developer Dubai Holding Commercial Operations Group (DHCOG) has also had its rating cut. Both developers are state-linked.
Moody's reduced ratings for Emaar and DHCOG by one notch each, bringing Emaar's rating to Baa1 from A3, two notches above "junk" status. Dubai Holding's rating was cut to A2 from A1.
Moody’s said: “The one-notch downgrade of both entities reflects the more severe fundamental strains facing their business models.”
Earlier this month another ratings agency, Standard & Poor's, downgraded Emaar to BBB+ from A-. A credit analyst at the firm said: "The rating action reflects the continued weak real estate markets in Dubai, and our increased uncertainties about the depth of the downturn and the pace of eventual recovery.
"The weak markets are negatively affecting our view of Emaar's business risk, and are likely to weaken Emaar's currently healthy financial position in the near to medium term.”
The news will further worry UK firms waiting for payments from Dubai developers.