Moody's Investors Services, the ratings agency, has downgraded US$2.14 billion (Dh7.86bn) of debt instruments issued by Dubai Holding Commercial Operations Group (DHCOG).
DHCOG, which has property, hotel and free zone businesses in the emirate, is part of Dubai Holdings, the conglomerate owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. It includes the Dubai Property development business, as well as Jumeirah hotel and leisure operations and TECOM business parks.
The downgrade affects DHCOG's medium-term note (MTN) facility, with the rating reduced from "B2" to "B3". Moody's probability of default rating (PDR) is left unchanged at "B3", but the agency is maintaining its review for possible downgrade of the PDR, as well as the overall corporate family rating (CFR) and further downgrade of the MTN. Last week, DHCOG announced it had reached agreement with its principal bankers to restructure a $555 million revolving credit facility, which will now be repayable over a five-year period on commercial terms.
"Despite the limited information so far regarding the new terms, Moody's believes the banks may now be in a preferential position vis-à-vis bondholders. We have reflected this by downgrading the debt instruments ratings to 'B3'," said Martin Kohlhase, Moody's assistant vice president analyst in the Middle East.
He added that the decision to continue the PDR at "B3" "indicated the continued high default risk until the capital market debt is refinanced over the next 14 months. DHCOG has to repay $240m in July and a further $500m in February next year.
"We normally do not respond to actions by the ratings agencies," said a spokeswoman for DHCOG. However, a source close to the company said Moody's had "rushed into a decision" on the downgrade, and should have waited for more information.
"The bondholders' situation has changed since last week, when the $555m deal was announced. They are in a weaker position. We had to act on that information," said Mr Kohlhase.
Moody's ratings review of DHCOG will conclude by the end of this month. "We will continue to hold discussions with DHCOG's management about the company's outlook, the business plan and the refinancing risks," the agency said.
"While some recent macro-economic and trade data represent evidence of a recovery in DHCOG's core recurring business activities, the Dubai property market remains hampered by over-capacities, where DHCOG plays a dominant role as one of the largest master developers."
fkane@thenational.ae
Zayed Sustainability Prize
Business Insights
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Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
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How England have scored their set-piece goals in Russia
Three Penalties
v Panama, Group Stage (Harry Kane)
v Panama, Group Stage (Kane)
v Colombia, Last 16 (Kane)
Four Corners
v Tunisia, Group Stage (Kane, via John Stones header, from Ashley Young corner)
v Tunisia, Group Stage (Kane, via Harry Maguire header, from Kieran Trippier corner)
v Panama, Group Stage (Stones, header, from Trippier corner)
v Sweden, Quarter-Final (Maguire, header, from Young corner)
One Free-Kick
v Panama, Group Stage (Stones, via Jordan Henderson, Kane header, and Raheem Sterling, from Tripper free-kick)
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