Wednesday, June 30, 2010

Moody's Downgrades DHCOG

Asa Fitch at The National has an article on Moody's recent downgrade of DHCOG.

"The credit ratings agency downgraded Dubai Holding Commercial Operations Group (DHCOG) by one notch on its rating scale to “B2” from “B1”and kept it on review for another drop. DHCOG, which has large holdings in the hospitality, business parks and property sectors, was unavailable for comment. The group was downgraded to “B1” last December, a rating already considered below investment grade."
You'll recall that last January, Dubai Holding had excoriated S&P for its:
  1. manifest "lack of understanding of DHCOG's business, its operations and relationship with the Government of Dubai." 
  2. "inaccurate statements coupled with factual errors that are misleading."  
While it may be unclear to some if Moody's is suffering from the same affliction or if S&P was indeed right after all, there's no confusion here at Suq Al Mal.


Laocowboy2 said...

The group was downgraded to “B1” last December, a rating already considered below investment grade."

In fact non-investment grades start at BB+/BB1 so a B2 rating is in fact five notches below investment grade - and getting perilously close to the C range which indicates either likely default or involuntary restructuring.

I rather suspect that Moodys understand all too well the business model and the governmental relationship - and see both as negatives rather than positives.

Abu 'Arqala said...


Yes, but what is their rating on the GCC scale? :)

Laocowboy2 said...

The GCC scale (rather like the various national scales) merely ranks borrowers in relation to one another rather than actually expressing a real opinion as to the likely timely servicing of debt. The potential for misuse is considerable. Only the international scale(s) have any value - although given the cock-ups of the ratings agencies on even these, I find the value of a GCC scle hard to determine without a microscope.

Abu 'Arqala said...
This comment has been removed by the author.
Abu 'Arqala said...


It is in the final analysis a "vision thing".

Some can truly see the unbounded and often unfounded potential.

Some are sadly stuck in the more mundane world of facts.