Moody's assigns Baa1 rating to Aldar Investment Properties

Moody's Investors Service on Wednesday assigned a Baa1 issuer rating to Abu Dhabi-based Aldar Investment Properties LLC, a private commercial real estate company that was recently established by Aldar Properties PJSC as a subsidiary and into which it is transferring the bulk of its recurring revenue property assets, said a statement, adding that the outlook on the rating is stable.

"Aldar Investments' Baa1 rating reflects the high quality recurring revenue asset portfolio, with a stable tenant base and occupancy rates, which partially offsets its geographic concentration risk in the Emirate of Abu Dhabi" said Lahlou Meksaoui, a Moody's Assistant Vice President -- Analyst.

“Aldar Investments' Baa1 rating is positioned one notch higher than that of its parent, Aldar Properties, as the newly formed Aldar Investments holds Aldar Properties' lower business risk recurring revenue property assets. In the event of financial stress at Aldar Properties, we would need to assess the scope for it to translate to Aldar Investments,” the statement added.

However, Moody’s said, “The rating could be downgraded if Aldar Investments' liquidity weakens or its credit quality deteriorates such that the adjusted debt/total assets ratio is above 40 percent or adjusted EBITDA to interest expense drops below 4.0x.”