DIFC Investments downgraded
Moody’s concerned about level of debt and lack of government support.
July 10, 2010 11:39 by Samuel Potter
Ratings agency Moody’s has lowered its ratings on DIFC Investments, reports Reuters.
The agency says the probability of default is higher thanks to lack of government support and concerns about Dubai’s ongoing debt restructuring. The move sees DIFC Investments dropped from a B2 rating to B3.
“DIFCI’s downgrade reflects the group’s highly leveraged financial profile, its expected heavy reliance on asset disposals in the coming 12-24 months … and its continued negative free cash flow generation,” said Niel Bisset, senior vice president at Moody’s in London in a statement.
The agency also says the downgrading represents the “significant impairments” in DIFC Investments’ real estate portfolio.
DIFC Investments is owned by Dubai International Financial Authority, which incorporates the activities of Dubai’s financial freezone, the Dubai International Financial Center, says Reuters.