|Dubai downgrades to hit rating, affect future debt|
|DUBAI: Dubai may struggle to gain a top-grade sovereign rating after Standard & Poor’s Rating Services and Fitch Ratings Agency downgraded outlooks on some of the emirate’s biggest government affiliated companies, according to leading analysts.
Both agencies lowered their outlooks for key Dubai Inc corporates including Dubai Holding Commercial Operations Group, Emaar Properties, DIFC Investments.
Dubai needs the best possible sovereign rating to help it tackle its debt liabilities amid rising costs for bank finance and an expected downturn in the emirate’s economy.
“The outlook revision reflects the impact of the difficult global macroeconomic and financing environment on the Emirate of Dubai, to which the ratings on these six entities are directly linked,” said Standard & Poor’s credit analyst Farouk Soussa in Wednesday’s rating statement.
Standard & Poor’s estimate Dubai’s debt, relative to gross domestic product, is about 42%. Compared with the US, where gross debt stands at more than 60% of GDP, according to the IMF.
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