UAE govt credit ratings unaffected by Dubai debt: Moody's

DUBAI: Moody's rating agency said on Monday that the credit quality of the governments of Abu Dhabi and that of the United Arab Emirates will be unaffected by Dubai World's debt.

"The recently announced restructuring of Dubai World's liabilities is unlikely to threaten the credit quality of the government of Abu Dhabi and the federal government of the UAE," it said in a statement.

Both governments are rated Aa2 with a stable outlook, it added.

But Moody's said the adverse impact of a Dubai World restructuring on the non-hydrocarbon sectors of the domestic economy "could potentially be severe, especially in Dubai."

"However, overall macro-economic stability is protected by the country's strong net external creditor position that is bolstered by Abu Dhabi's accumulated oil wealth," according to Tristan Cooper, head analyst for Middle East Sovereigns at Moody's in Dubai.

Moody's said the UAE's high investment-grade sovereign rating is boosted by its "robust external position," backed by huge foreign assets held by Abu Dhabi Investment Authority (ADIA), which it put at no less than 284 billion dollars.

"ADIA's foreign assets alone are considerably greater than the external liabilities of the country," it said.

"The margin of comfort widens when taking into account the foreign assets of the central bank, local commercial banks, other state-owned enterprises and the non-bank private sector," it added.