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Moody's assigns 'Aa2' rating to ADQ for first time; outlook stable

Moody's assigns 'Aa2' rating to ADQ for first time; outlook stable
Moody's has classified ADQ as a government-related issuer

UAE - Mubasher: Moody's Investors Service (Moody's) has assigned a long-term issuer rating of 'Aa2' for Abu Dhabi Developmental Holding Company (ADQ) for the first time, with a stable outlook.

ADQ was established by the Abu Dhabi government, following which some government-owned companies with domestic operations were transferred to the company, according to a recent press release.

Moody's has classified ADQ as a government-related issuer (GRI), which means the global rating agency does not assign a baseline credit assessment (BCA) and its rating was based on the ability of the Abu Dhabi government to provide timely financial support to the company.

ADQ's standalone credit quality is based on its large scale with a portfolio of more than 90 operating entities, the investments in assets including TAQA and Abu Dhabi Ports, and the good liquidity at the holding level.

Moody's also recognized the company's geographical concentration with the majority of its investments in Abu Dhabi and revenue and cash flow concentration with TAQA representing the majority of the company's earnings before interest, tax, depreciation, and amortisation (EBITDA) in 2020, and high leverage at the group level.

Meanwhile, the stable outlook comes in line with the stable outlook on the rating of the Abu Dhabi government due to the strong credit links between both of them.