UAE - Mubasher: Moody's Investors Service has assigned Dubai Aerospace Enterprise (DAE) Baa3 long-term issuer rating, with a negative outlook, according to a press release on Tuesday.

Moody's ratings assigned to DAE and its subsidiaries have reflected the company's consolidated credit profile, strong liquidity position, and disciplined risk management processes.

The international rating agency noted that as at 30 June 2020 on a Pro-forma basis, DAE's multiple sources of liquidity provided about 280% coverage of cash requirements for operating expenses, debt maturities, and aircraft purchase commitments for the following twelve months.

On the other hand, the negative outlook of Moody's shows its expectations of a more extended and weaker recovery in air travel, which will lead to higher risks to earnings, cash flow, liquidity, and capital positions.

DAE and other aircraft leasing companies are negatively affected by the unprecedented decrease in the aviation sector amid the coronavirus (COVID-19) pandemic.

However, Moody's expects that air passenger demand will recover strongly toward 2019 levels during 2023.