Mubasher: Moody's Investors Service affirmed on Monday the B1 corporate family rating (CFR) and B1-PD probability of default rating (PDR) of Dar Al Arkan Real Estate Development Company (DAAR), with a “stable” outlook”.
The ratings agency has assigned a provisional (P)B1 rating to Dar Al-Arkan Sukuk Company's trust certificate issuance programme, with a “stable” outlook.
Moody's has also assigned B1 (LGD 4) ratings to both outstanding sukuk issued under the programme; the $450 million sukuk due in 2018 and $400 million sukuk due in 2019.
Changing the outlook to stable reflects Moody's view that DAAR's operating environment will stabilize in 2017
“Despite the challenging and uncertain conditions seen in 2016, DAAR has continued to demonstrate its financial flexibility to generate free cash flows in order to meet its debt obligations," according to Rehan Akbar, a Moody's Assistant Vice President -- Analyst.
The Saudi government’s initiatives to support the non-oil sector will be supportive to the development of the real estate sector.
On another note, Moody's expected real GDP to decline by 0.2% in 2017 before
growing by 1.7% in 2018.
The ratings agency forecasted about 2% real non-oil growth in 2017 on the back of increased government spending.
