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S&P Affirms A+, A-1 Ratings on DIFC Investments

In a statement, S&P said it has also affirmed its ‘A+’ senior secured debt rating on Dubai Sukuk Centre Ltd.’s $1.25 billion floating-rate trust certificates (sukuk Al Mudaraba) due 2012. “The outlook on all ratings is stable,” the rating agency said.

DIFC Investments manages the DIFC’s revenue-generating operations, which can broadly be subdivided into leasing and investments. DIFC itself is the vehicle through which Dubai proposes to position itself as a regional and world financial hub. “Despite the ongoing global financial turmoil, we believe the long-term prospects for Dubai as a financial centre remain solid,” it added.

S&P said the ratings on DIFC Investments are supported by the strong and continued backing of the government of Dubai. In creating DIFC, the government granted 110 acres of prime land in central Dubai to establish the physical infrastructure it required. The government has since facilitated the provision of the necessary accompanying municipal services such as roads, electricity, and water. The law governing DIFC stipulates that DIFCA, which was later commuted to DIFC Investments, shall have an independent budget but that the government will provide enough funds for this purpose.

Payment of dividends to the government is not required under the law governing DIFC.

“The stable outlook on DIFC Investments reflects the likelihood of ongoing and, should the need arise, extraordinary support from the government of Dubai,” the rating agency said.