Government-related companies in Abu Dhabi have borrowed more than $18bn in 2009, increasing the risk that the emirate’s government may be asked to help service these debts, according to a report by ratings agency Fitch.
Wholly and partly state-owned firms have borrowed more than $18bn from the bond and loan markets in the first eight-and-half months of 2009, according to the Fitch report.
“With a variety of quasi-sovereign entities borrowing, the risk grows that one may eventually have to call upon the sovereign to help it service debts,” says Charles Seville, associate director in the sovereigns group at Fitch.
“Abu Dhabi’s strong balance sheet enables it to weather most conceivable shocks,” he says.
Several government-related companies have issued bonds in 2009, including Mubadala Development Company’s $1.75bn issue, Aldar’s $1.25bn, and Tourism Development & Investment Company’s $1bn sale.