The refinancing of Nakheel’s US$3.5bn (Dh12.85bn) Islamic bond will be the litmus test for how credit ratings agencies assess Dubai government-controlled companies, a senior Moody’s analyst said yesterday.
Nakheel, the developer of Dubai’s Palm Islands, is seeking to refinance the bond this year, an exercise that is being closely monitored by credit rating agencies.
'What happens at Nakheel will affect the six ratings that we have in Dubai,' said Philipp Lotter, the senior vice president of corporate finance at Moody’s Investors Service. 'It’s a highly strategic company that, from our view, does not have the stand-alone capacity to repay this bond. This leaves one question open: how will this bond be addressed in December?'