S&P's assigns AA/A-1+ to Mubadala
Dubai, September 16, 2008
Standard & Poor's Rating Services said that it has assigned an 'AA' long-term and 'A-1+' short-term corporate credit ratings to the Abu Dhabi-based Mubadala Development Company, with a stable outlook.
"The ratings on Mubadala have been equalised with those on the government of Abu Dhabi. Although the Abu Dhabi government has not formally guaranteed Mubadala's liabilities, the group has a high-profile policy role in diversifying the Abu Dhabi economy.
"This, coupled with Mubadala's operational proximity to the Abu Dhabi government, leads Standard & Poor's to conclude that the government has the capacity and willingness to continue to provide substantial ongoing support to Mubadala's operations, and to intervene in a timely manner if the company were to face financial difficulties," said Standard & Poor's credit analyst Farouk Soussa.
The ratings on the Emirate of Abu Dhabi are supported by the government's very strong asset position, which provides significant financial flexibility; the country's high level of political stability and wealth, underpinned by its rich resource endowment; and by policies that reinforce Abu Dhabi's integration with the global economy.
The ratings are constrained by the geopolitical risks that all sovereigns in the region face, the limited disclosure on the government's assets, and increasing contingent liabilities arising from the banking system and the UAE's public sector as a whole.
S&P's said: "We consider that Mubadala will remain strategically important and operationally close to the government of Abu Dhabi, and will continue to benefit from substantial ongoing support to its operations.
"Any lowering in the credit rating on the government of Abu Dhabi, or any indication that the government's commitment to Mubadala is weakening, would result in a lower credit rating on the company."
A higher rating could result from improvement in the credit quality of the Emirate of Abu Dhabi, to which the underlying credit risk of Mubadala is linked. - TradeArabia News Service
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