The rating outlook remains stable for DP World and assigned stable for DP World Salaam
Moody's Investors Service, has today assigned a Ba2 rating to the proposed benchmark sized reset subordinated perpetual notes and sukuk certificates (hybrid instruments) to be issued by DP World and DP World Salaam, respectively.
DP World's and DP World Crescent Limited's existing ratings remain unchanged. The rating outlook remains stable for DP World and assigned stable for DP World Salaam.
The Ba2 rating assigned to the proposed benchmark sized hybrid instruments is two notches below DP World's Baa3 senior unsecured and issuer rating, because they will be deeply subordinated to the senior unsecured obligations of DP World and its subsidiaries and rank senior only to ordinary shares, Moody's said.
In addition, the hybrid instruments will be perpetual and DP World has the option to defer coupon payments on a cumulative and compounding basis. The rating on the hybrid instruments are subject to review of the final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed, the ratings agency noted.
The stable outlook reflects DP World's broad geographic portfolio of well-located port assets, variable cost structure and a strong liquidity profile that gives DP World flexibility to weather the expected decline in global trade in 2020, Moody's said.
The rating incorporates Moody's view that DP World's liquidity is sufficient to withstand the difficult operating conditions under its central scenario, underpinned by $3.4 billion of cash balances as of 31 March 2020 combined with a $2 billion revolving credit facility, of which $1 billion is undrawn, with good covenant headroom.
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