Blue City, the largest property development in Oman, has had its bond credit rating downgraded to junk status, in a sign that the government’s efforts to diversify the economy is under strain because of the global financial crisis.
Citing slow sales at the Blue City development and 'a less-favourable macroeconomic environment', Moody’s Investor Services downgraded about US$399m (Dh1.47bn) of senior notes to “Ba1” from “Baa3”. The rating is now below investment grade.
Blue City – or Al Madina A’Zarqa – is a $20bn development located about 45 minutes north of Muscat. The plan is to create a new lifestyle city over the next 20 years with hotels, schools, hospitals and housing for 200,000 people.