Moody's Investors Service and Standard & Poor's yesterday assigned to the Tourism Development and Investment Company, or TDIC, Aa2 long-term local and foreign currency issuer ratings and AA long-term and A-1+ short-term corporate credit ratings respectively. Both rating agencies said TDIC's outlook is stable.
"The ratings on TDIC have been equalised with those on the Government of Abu Dhabi, which has sole ownership of the company through the Abu Dhabi Tourism Authority (ADTA)," said S&P's credit analyst Farouk Soussa.
Martin Kohlhase, Moody's Dubai-based Assistant Vice-President and lead analyst for TDIC, added: "The underlying business will rely on ongoing government subsidies and funding as well as third party external debt instruments to meet its funding gap."
TDIC is currently developing around 60 residential, hospitality and cultural projects with an expected total cost of Dh100 billion.
In order to carry out its mandate there will be significant funding requirements which are expected to be largely met by third-party debt, land sales and ongoing government subsidies and funding, Moody's said.
It added that leverage is expected to peak in 2010, but should subside thereafter when developed residential units will be sold. Moody's said the outlook for TDIC is stable, assuming no changes in ownership structure, public mandate or government support and that the company adheres to its financial target of debt to equity not exceeding 100 per cent.
S&P's Soussa said: "The stable outlook reflects our view that TDIC will remain strategically important and operationally close to the Abu Dhabi Government, and will continue to benefit from substantial support."
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