RPT-Fitch Affirms Mubadala Development Company PJSC at 'AA'; Outlook Stable
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Sept 11 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed Mubadala Development Company PJSC's (Mubadala) Long-term Issuer Default Rating (IDR) and senior unsecured rating at 'AA'. The Abu Dhabi-based diversified development and investment group's Short-term IDR has been affirmed at 'F1+'. The Outlook for the Long-term IDR is Stable. Mubadala Development Company - GMTN B.V.'s (MDC) global medium-term note (GMTN) programme and notes outstanding and MDC's euro commercial paper programme (ECP) has also been affirmed at 'AA' and 'F1+' respectively.
KEY RATING DRIVERS
Fitch applies its parent and subsidiary rating linkage methodology in rating Mubadala, concluding that a strong relationship exists between Mubadala and the Emirate of Abu Dhabi ('AA'/Stable/'F1+'), resulting in the ratings being aligned. Strong sovereign ties remain the primary rating driver for Mubadala.
Consistent State Funding:
As of FYE 2012, the company had received shareholder contributions from the government totalling AED120.3bn, of which the cash contributions totaled AED28.2bn.
Long-Term State Ownership:
Mubadala's 100% state ownership status is mandated by law and unlikely to change. It can only be dissolved after 2052, 50 years from its formation, by Emiri decree, or if its mandate is deemed complete. Established in 2002 through Emiri decree No. 12, Mubadala is Abu Dhabi's primary business development company.
State Development Strategy:
Mubadala's mission is to achieve economic returns while advancing the government's long-term policy plans - the Abu Dhabi Economic Vision 2030. Abu Dhabi wants Mubadala to drive economic and social development to ensure an increase in wealth for future generations. Board membership includes five members of the Abu Dhabi executive council, including the chairman, Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi.
Unaffected by Public Debt Policy:
In October 2012, Fitch noted that Abu Dhabi's four major state-owned enterprises (SOEs), including the three rated by Fitch - Mubadala, International Petroleum Investment Company PJSC (IPIC;'AA'/Stable), and Tourism Development & Investment Company (TDIC;'AA'/Stable) - are essentially unaffected by the emirate's recently approved public debt policy, and are all aligned with Abu Dhabi's sovereign ratings.
Fitch continues to apply its parent and subsidiary rating linkage methodology in rating these entities, as we understand that the implicit state support from the Emirate of Abu Dhabi has not changed from that previously announced. Fitch does not rate the fourth of the emirate's largest SOEs - Abu Dhabi National Energy Company PJSC (TAQA). For more details, see 'Fitch: Major SOE Ratings Still Benefit from Abu Dhabi Support', dated 24 October 2012 at www.fitchratings.com.
Sovereign Rating Change: A change in Abu Dhabi's ratings would result in a change of Mubadala's ratings.
Implied Support: Any change in the implied support and commitment from, and ownership by, the state of Abu Dhabi would prompt a review of the ratings.
Operational Structure: A significant change in Mubadala's operational structure or any potential flotation of key operating assets would prompt a review of the ratings.
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