Standard & Poor鈥檚 assigned rating lower than investment grade to Emaar and five other companies, and four Dubai banks
Dubai developer Emaar has had its credit rating slashed to 鈥渏unk鈥� by agency Standard & Poor鈥檚. S&P announced today it had cut its ratings for six companies in Dubai to junk. The others are ports operator DP World, DIFC Investments, Jebel Ali Free Zone, Dubai Multi Commodities Centre Authority and Dubai Holding Commercial Operations Group.
The term 鈥渏unk鈥� refers to a vehicle S&P rates below investment grade or lower than the rating BBB. Investment grade bonds are legal for banks to buy, whereas junk bonds are not.
The news follows last week鈥檚 announcement that Nakheel and its parent company Dubai World are seeking to delay replaying their debts, sparking fears among UK construction firms owed money in Dubai. S&P said it would not assign ratings to Nakheel and its troubled parent Dubai World as it considers requesting a credit standstill to be the equivalent of a default.
S&P also cut ratings to junk for four Dubai banks, Emirates Bank International, National Bank of Dubai, Mashreqbank and Dubai Islamic Bank, owing to their exposure to government related entities.
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