UAE developers may have credit rating downgraded

Major UAE developers including Aldar and Abu Dhabi Tourism Authority may have their credit ratings downgraded.

Ratings agency Moody's said on Wednesday it had placed under review its ratings for seven UAE firms, including Mubadala, the developer of Abu Dhabi's super sustainable city, Masdar. The others developers are Abu Dhabi National Energy Company (Taqa), International Petroleum Investment Company (IPIC),the issuer rating for the Emirates Telecommunications Company (Etisalat) and the issuer ratings and long-term debt rating of Dolphin Energy.

Moody's said the move was prompted by the failure of the Dubai government to guarantee the debts of Dubai World, the state-linked owner of developer Nakheel, which asked for a shock "standstill" on paying $26bn of its debts two weeks ago.

The ratings agency said it would "re-validate and possibly reconsider our support assumptions following Dubai’s recent decision to explicitly segregate its direct obligations from those of [government related companies].”

The news comes as Dubai developer Emaar called off its planned merger with three entities owned by Dubai World. Emaar, owned by state company Dubai Holdings, in June announced plans to merge with Dubai Properties, Sama Dubai and Tatweer.

The Dubai stock market plunged for the third day in a row on , reflecting investors' fears over the ability of Dubai to cope with its mountain of debt.

The Dubai Financial Market's benchmark index closed 6.3% down and Abu Dhabi's market was fell 2.8%.