Moody’s Investors Service on Thursday downgraded seven government-related UAE companies, some by several notches, despite its conclusion that the seven are “vehicles of [Abu Dhabi] government policy”.
Mubadala Development Company (Mubadala), International Petroleum Investment Company (IPIC), Tourism Development & Investment Company (TDIC), Abu Dhabi National Energy Company (TAQA), Emirates Telecommunications Company (Etisalat), Dolphin Energy (Dolphin) and Aldar Properties (Aldar) were all downgraded in the review.
With regards Mubadala, IPIC and TDIC, the ratings agency concluded that the companies “are vehicles of government policy, and are embedded in a framework of government funding and oversight that enables them to achieve ratings close to the ratings of the sovereign itself”.
“Furthermore, the government has formally assured Moody’s that it fully and unconditionally stands behind these entities for any debt – both principal repayments and debt servicing – on a timely basis in the event that the company were unable to provide for itself, a policy that is also expected to remain in place for the foreseeable future,” it added.
Nevertheless, in lieu of a formal agreement with the government and the companies, Moody’s said it had decided to introduce a “moderate distinction” between their ratings and that of the sovereign.
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