Abu Dhabi – Mubasher: Moody's Investors Service has confirmed its long-term issuer rating of the government of Sharjah at A3 and maintained its ‘stable’ outlook.
The ratings agency cited three factors for its A3 rating and stable outlook confirmation, including its predictions that upcoming implementation of the value-added tax (VAT) will reduce the fiscal deficit and stabilise the government’s debt levels in the coming years.
“Improved performance of key government-related issuers which has lowered the risks posed by contingent liabilities to the government's balance sheet,” Moody’s said was the second factor, according to a statement.
The emirate of Sharjah’s “resilient economic strength” is underscored by its relatively diversified industrial base and by government initiatives, which encourage foreign direct investment (FDI), the ratings agency added.
“Moody's has also affirmed the A3 ratings on backed senior unsecured debt issued by Sharjah Sukuk Limited and Sharjah Sukuk (2) Limited's senior unsecured debt, special purpose vehicles established by the Government of Sharjah,” the statement showed.
These trust certificates are seen as direct obligations by the Sharjah government and their ratings automatically reflect changes to Sharjah's sovereign rating, Moody’s concluded.
