Dubai not seeking credit rating ahead of roadshow

Dubai’s Department of Finance has no plans to seek a credit rating for the time being, it said late on Tuesday, reiterating the Gulf emirate’s long-held position as it embarks on a debt roadshow.

The emirate said on Friday it planned to launch a non-deal roadshow for fixed income investors in Asia, a move analysts have said suggested the emirate may issue bonds later this year as it restructures $23.5 billion of debt.

“Dubai does not currently have plans to seek a credit rating,” a spokeswoman for the Dubai Department of Finance said.

She did not give a reason, saying she had no indications whether the government’s attitude might change in the future.

Oil-producing emirate Abu Dhabi is rated at Aa2 by Moody’s and AA by Standard & Poor’s.

Credit ratings assess a borrower’s ability to pay back debts and help investors gauge risks compared to other entities.

They ease market access to debt financing and help an issuer broaden a demand base as some investors cannot tap into unrated debt issues, but they also place issuers under regular scrutiny.

Increased fiscal transparency is one of the strategic goals set by Dubai’s Department of Finance.

This week’s planned roadshow is Dubai’s second in the past three months.

Dubai’s finance chief told Reuters on Sunday the emirate would keep its options open for a potential sovereign debt issue later this year but it is not under pressure to do so.