Moody's cuts Gulf General

Moody's Investors Service said it downgraded to B2 from B1 the corporate family and probability of default ratings of Gulf General Investment Co.

The ratings also were placed on review for possible downgrade.

The downgrade was prompted by increasing risks associated with its sustained refinancing challenges, concerns due to the expectation of continued negative performance of its investment holdings and the challenging conditions in Dubai's real estate market, the agency said.

Moody's said it is particularly focused on the company's continuing exposure to refinancing risk related to its perpetual roll-overs.

This risk should have been partially addressed by the proposed issuance of notes by the end of the first quarter of 2011, but it was postponed due to challenging market conditions and is now unlikely to occur, the agency said.

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