Dubai Commercial drops S&P agency due to 'inaccurate statements'

By Susanna Moon

Chicago, Jan. 25 - Dubai Holding Commercial Operations Group dropped Standard and Poor's because of the agency's lack of understanding of the business, its operations and relationship with the government of Dubai, according to a company press release.

The company said that despite "engaging with S&P and sharing adequate information frequently and in a transparent manner, S&P has nevertheless issued inaccurate statements coupled with factual errors that are misleading."

Dubai Commercial said it discredits and disagrees with the content of the latest S&P report, which was released Monday.

In the report, S&P said that it lowered the company's long-term corporate credit rating to B from BB+, assigned a negative outlook and withdrew the rating due to what it considered to be inadequate timeliness of information and insufficient documentation.

"The rating actions reflect our base-case scenario, based on the information we currently have, which notably incorporates materially-weaker-than-anticipated cash flow generation," S&P analyst Pierre Georges said in an agency release.

This is based on expectations of lower sales and lower selling prices of real estate units and still high cash outflows related to new investments, the agency noted, as well as a lack of market transparency, reliable market data and the low level of available financial information.

These negative factors outweigh the company's strong position in the Dubai real estate market, its stable rental income from investment properties and strong asset base, according to the agency.

Dubai Commercial said it assures investors that it will continue to work closely with other rating agencies and directly with investors in full transparency.

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