Credit rating agency Standard and Poor’s (S&P) has assigned state-owned Dubai Holding a negative outlook and withdrawn its rating for the group because of a lack of information, it said on Monday.
S&P said in a statement that it had assigned Dubai Holding “a negative outlook, and removed it from CreditWatch with negative implications, where it had been placed on April 30, 2009.”
The agency said it initially lowered the long-term corporate credit rating of the group to “B” from “BB+”.
“We subsequently withdrew the rating due to what we consider to be inadequate timeliness of information and insufficient documentation provided by DHCOG [Dubai Holding Commercial Operations Group] to maintain our surveillance,” it said.
Dubai Holding responded to S&P’s announcement by declaring that it has itself dropped S&P as a rating agency “due to its lack of understanding of DHCOG’s business, its operations and relationship with the government of Dubai.”
“Although DHCOG has been engaging with S&P and sharing adequate information frequently and in a transparent manner, S&P has, nevertheless, issued inaccurate statements coupled with factual errors that are misleading,” it said.
“Therefore, DHCOG discredits and disagrees with the content of the latest S&P report dated January 25, 2010,” it added.
The Dubai group said it would continue to work with other rating agencies and directly with investors with “full transparency.”
S&P credit analyst Pierre George said “the rating actions reflect our base-case scenario, based on the information we currently have, which notably incorporates materially-weaker-than-anticipated cash flow generation by DHCOG.”
The agency said it expected lower sales and lower selling prices of real estate units, and still-high cash outflows related to new investments.
S&P’s announcement is the latest blow to the debt-ridden emirate, which rocked global markets in November after requesting a six-month freeze on debt payments by Dubai World, Dubai’s largest conglomerate, in order to restructure it.
State firms in Dubai have since fallen from grace, with the government also saying it would not guarantee its corporates’ debts.
S&P said the lack of information from DHCOG has reduced certainty about ongoing support from the Dubai government, which it previously factored into the rating “as a key credit strength.”
“We now do not factor any ongoing government support into our rating because of this lack of information,” it said. “We also see the lack of market transparency [and] reliable market data, and the level of available financial information, which we consider low, as other negative factors.”
S&P said the group’s ability to meet its 2010 debt maturities could ultimately be weakened: “We believe that DHCOG’s exposure to the severe downturn in the Dubai real estate market also constrains its credit quality. We understand that free cash flows are likely to be negative for 2009 and 2010.”
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
US President Donald Trump has threatened to impose up to 100 percent tariffs on Taiwan’s semiconductor exports to the US to encourage chip manufacturers to move their production facilities to the US, but experts are questioning his strategy, warning it could harm industries on both sides. “I’m very confused and surprised that the Trump administration would try and do this,” Bob O’Donnell, chief analyst and founder of TECHnalysis Research in California, said in an interview with the Central News Agency on Wednesday. “It seems to reflect the fact that they don’t understand how the semiconductor industry really works,” O’Donnell said. Economic sanctions would
‘NO DISRUPTION’: A US trade association said that it was ready to work with the US administration to streamline the program’s requirements and achieve shared goals The White House is seeking to renegotiate US CHIPS and Science Act awards and has signaled delays to some upcoming semiconductor disbursements, two sources familiar with the matter told reporters. The people, along with a third source, said that the new US administration is reviewing the projects awarded under the 2022 law, meant to boost US domestic semiconductor output with US$39 billion in subsidies. Washington plans to renegotiate some of the deals after assessing and changing current requirements, the sources said. The extent of the possible changes and how they would affect agreements already finalized was not immediately clear. It was not known