Moody's Investors Service has upgraded the corporate family rating (CFR) of Dubai Holding Commercial Operations Group (DHCOG) to B1 from B2 and the company's probability of default rating (PDR) to B1-PD from B2-PD.

Concurrently, Moody's has upgraded the provisional rating of Dubai Holding Commercial Operations MTN Limited to (P)B1 from (P)B2 and the multi-currency debt instruments issued under this medium-term note (MTN) programme to B1 from B2. In addition, Moody's has assigned a positive outlook to all ratings.

"We have upgraded DHCOG's ratings because we believe that the company will be able to fully address its upcoming debt maturities, including its
EUR750 million bond due in January 2014, as a result of its subsidiary Jumeirah Group raising an unsecured $1.4 billion syndicated loan," said Rehan Akbar, an analyst in Moody's Corporate Finance Group and local market analyst for DHCOG.

RATINGS RATIONALE

Today's rating action follows the announcement made on October 30 by Jumeirah Group, one of DHCOG's four subsidiaries, that it has raised an unsecured $1.4 billion syndicated loan to be used to fund growth as well as for general corporate purposes at the DHCOG level. The loan facility will improve DHCOG's debt maturity profile and liquidity materially. The company will be able to use its internal available funds as well as the new loan to fully address its upcoming debt maturities, with the next significant debt repayment now being the GBP500 million bond due in February 2017. In particular, the loan has removed the refinancing risk associated with DHCOG's upcoming EUR750 million bond due on January 30, 2014, Moody's said.

Moreover, both Jumeirah and Tecom Investments have demonstrated resilience throughout the economic downturn and the overall risk profile of the consolidated group is being reduced by the strengthening profile of a third subsidiary, Dubai Properties Group (DPG), which is a result of the strong upturn in Dubai's real estate market.

The positive rating outlook assumes that DHCOG will continue its deleveraging efforts through selective non-core asset sales and that recurring revenues from Tecom, Jumeirah and DPG subsidiaries will continue to provide significant debt coverage, it said. - TradeArabia News Service