Abu Dhabi ratings affirmed At AA/A-1+ and outlook stable
S&P Global Ratings affirmed its 'AA' long-term and 'A-1+' short-term foreign and local currency sovereign credit ratings on the emirate of Abu Dhabi, United Arab Emirates (UAE). The outlook is stable.
At the same time, the ratings agency affirmed its 'AA' long-term foreign currency issue rating on the sovereign-guaranteed bond of senior unsecured debt issued by Waha Aerospace BV.
The stable outlook on Abu Dhabi reflects S&P’s expectation that economic growth will gradually pick up and its fiscal position will remain extremely strong over the next two years, although structural and institutional weaknesses will likely persist. The ratings on Abu Dhabi could be raised if S&P observes pronounced improvements in data transparency, including on fiscal assets and external data, alongside further progress in institutional reforms. Moreover, measures to improve the effectiveness of monetary policy, such as developing domestic capital markets, could be positive for the ratings over time.
S&P could consider a negative rating action if a material deterioration in Abu Dhabi's currently very strong fiscal balance sheet and net external asset position was expected. If fiscal deficits or the materialisation of contingent liabilities led to a drop in liquid assets to below 100 per cent of GDP, pressure on the ratings would develop. A downward rating action could also follow domestic or regional events that compromised political and economic stability in Abu Dhabi.