S&P Global Ratings has affirmed its ratings Mubadala and International Petroleum Investment Company (IPIC), the two sovereign wealth funds that are being merged for synergies.
The ratings agency affirmed AA long-term and A-1+ short-term issuer credit ratings on Mubadala Development, Abu Dhabi's principal agent for diversifying the domestic economy away from hydrocarbon revenues, according to Khaleej Times.
The agency also affirmed its AA/A-1+ long- and short-term local and foreign currency issuer credit ratings on IPIC.
S&P believes the Abu Dhabi government would “provide timely and sufficient extraordinary support to IPIC in the event of financial distress”, it said in a statement.
"We understand that IPIC and Mubadala will continue to operate independently until the joint committee concludes its assignment, which could take up to six months. Both Mubadala and IPIC have outstanding commercial debt that will need to be taken into consideration in the merger process. It is currently unclear which, if either, of the current entities will continue to exist, or if a new holding company will emerge," S&P said.
The government announced plans to merge Mubadala with IPIC in June.
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