Moody's downgrades ENBD from A3/Prime-2 to A2/Prime-1; cites negative outlook on UAE bank.
Moody's downgraded the local and foreign currency debt and deposit ratings of Emirates NBD, the UAE's third largest bank by market value, from A3/Prime-2 from A2/Prime-1, and its subordinated debt rating from A3 to Baa1.
"Today's rating action takes account of ENBD's exposures to Dubai World, the troubled Dubai government-owned conglomerate," Moody's said in a statement, citing a negative outlook on the Dubai-focused bank.
The ratings were also a response to "DW's restructuring proposal which Moody's believes will result in moderate losses that can easily be replenished given the bank's good core income generating ability."
Emirates NBD is one of two local banks that are part of a seven-member committee leading talks between Dubai World and its creditors.
Dubai World sealed a deal to restructure $23.5 billion in debt with its core lenders in May, but it has yet to strike an agreement with remaining creditors. (Reuters)