No rating impact from Dubai’s DP World IPO, says Moody’s

Moody’s Investors Service said that the announced initial public offering of an approximate 20% stake of Dubai port operator DP World would have no impact on the company’s A1 credit ratings and its outlook also remains stable.

“We have factored a potential monitory sale of the company into our ratings from day one, and with this expected to be around 20%, DP World remains controlled by the government”, said Philipp Lotter, Dubai/DIFC based Senior Credit Officer at Moody’s and lead analyst for DP World.

“The IPO is also likely to contribute to corporate transparency and will subsequently benefit holders of its bonds and Sukuk”, Lotter added.

Moody’s views DP World as a government-related issuer. Its fundamental credit profile is further complemented by Moody’s view of high government support that would be extended to the company, if needed. This view is supported by the strategic importance of DP World to Dubai and the wider region, given its operatorship of the Jebel Ali Port — the largest in the Middle East — and the vital role DP World plays in facilitating Dubai‘s maritime transportation and trade sectors. The reduction in the government’s stake in the company does not fundamentally change this argument.

DP World, headquartered in the Dubai International Financial Centre, ranks amongst the world’s four largest container terminal operators by capacity and throughput, which in 2006 was 48.6 mln twenty-foot equivalent units (TEU) and 36.8 mln TEU, respectively (excluding POPNA, Shekou and Colombo which were divested in early 2007). The company is one of the most geographically diversified companies, operating a current total of 42 terminals in 22 countries.