Mubadala Development Company yesterday got good ratings from Standard & Poor's, Fitch and Moody's.
S&P's Rating Services has assigned its AA long-term and A-1+ short-term corporate credit ratings to the company with a stable outlook. Moody's Investors Service issued ratings of Aa2 with a stable outlook. This is the first time that Fitch Ratings has assigned Mubadala issuer default and senior unsecured ratings of AA with a stable outlook and a short-term rating of F1+.
"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 S&P'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 S&P'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, said S&P.
Fitch has applied its parent and subsidiary rating linkage methodology in the rating of Mubadala, concluding that a strong relationship exists between Mubadala and the Emirate of Abu Dhabi (AA/Stable), and as such the rating of Mubadala has been aligned with Fitch's sovereign rating of Abu Dhabi.
According to Moody's, important factors for Muba-dala's ratings are the long-term stability both in Mubadala's ownership structure and in its government mandate, given the current early development nature of its business and financial profiles, which rely substantially on government funding and oversight.
Although not anticipated, any gradual de-linkage of Mubadala from the government would therefore result in a greater emphasis on stand-alone credit features, said Moody's.