Fitch lowers Tamweel to E

Fitch Ratings said it downgraded Tamweel PJSC's individual rating to E from C/D and kept its A long-term issuer default and senior unsecured ratings, F1 short-term issuer default rating and A support rating floor on Rating Watch evolving. The support rating is affirmed at 1.

The downgrade of the individual rating reflects Fitch's concerns about Tamweel's weak liquidity and funding profile, the possibility that the company's liquidity and funding could soon require direct support from the United Arab Emirates authorities and its exposure to the untested Dubai property market.

The agency said the rating also reflects Tamweel's leading franchise in UAE residential mortgages and satisfactory capitalization.

The Rating Watch evolving reflects uncertainty over the company's future ownership, Fitch said. In October, Tamweel announced a merger with Amlak under the auspices of the Investment Corp. of Dubai. Then in November, the UAE Ministry of Finance announced it would merge Tamweel with Amlak under the umbrella of Real Estate Bank, and in early February, the UAE Cabinet announced a plan to resolve Tamweel's and Amlak's future through the formation of a steering committee. The Rating Watch will be resolved when Tamweel's ownership structure becomes clear.

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