Moody's and S&P could review Emaar rating

Dubai: Moody's Investor Services and Standard & Poor's could reassess Emaar Properties credit rating if its plans to swap land for shares with Dubai Holding fall through, analysts at the agencies said yesterday.

Moody's assigned the real estate developer a long-term foreign and local currency rating of "A3" in July while S&P assigned the company an "A-" in the same month.

Emaar said on March 19 it would give 2.364 billion new shares to Dubai Holding in exchange for land. It has yet to give details of the agreement including the extent, location and value of land.

The deal could be concluded next month, Amit Jain, chief financial officer of Emaar Dubai, said on Tuesday, holding out the possibility that talks could collapse if the terms were not good for shareholders.

"If it doesn't happen we need to look at the smaller government ownership and smaller land bank as it could have implications for the rating," said Phillip Lotter, senior credit analyst at Moody's. "At the moment the rating is stable and there was nothing to suggest it should change. The company is performing well and building up the international portfolio. The single biggest factor is the land-for-share deal," Lotter said.

"In case the deal would not close, we would look at the reason why and see if that also would impact our view on the implicit support from the government factored into the ratings," S&P credit analyst Alf Stenqvist said. "We have an ongoing surveillance of the rating and if the deal doesn't go through we would look at it again," Stenqvist added.