S&P affirms Damac Real Estate

S&P said it affirmed its BB long-term issuer credit rating on Damac Real Estate Development Ltd. The outlook is stable.

S&P also affirmed its BB issue rating on the three sukuk trust certificates ($500 million, $125 million and $452.3 million) issued by Damac through three special purpose vehicles: Alpha Star Holding III Ltd., Alpha Star Holding IV Ltd. and Alpha Star Holding Ltd. The recovery rating remains 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 65%) in the event of default.

“The affirmation reflects that, although Damac's financial performance deteriorated in 2017 and we expect it to weaken further in 2018 and 2019, our current ratings on Damac include headroom for weakening financial performance driven by the real estate downcycle,” S&P said in a news release.

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