Moody's may cut Qatar Real Estate

Moody's Investors Service said it placed the A2 local- and foreign-currency issuer ratings for Qatar Real Estate Investment Co. and the A2 rating for the $300 million trust certificates (sukuk) due 2012 issued by Qatar Alaqaria Sukuk Co. under review for possible downgrade following the Qatari government's directive that Qatar Real Estate merge with Barwa Real Estate Co.

Given the limited information at this stage, Moody's said its review will focus on the impact the merger will have on the business and financial risk profile, as well as any changes in the government ownership and implicit support assumptions that currently underpin Qatar Real Estate's A2 ratings.

Qatar Real Estate's stand-alone rating is susceptible to downgrade as it is currently weakly positioned because of a highly-levered capital structure in a weakening macroeconomic environment, the agency added.

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