Moody’s downgrades DAAR to B1

Moody's Investors Service said it downgraded Dar Al Arkan Real Estate Development Co.’s (DAAR) corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD.

The outlook is negative.

"The rating downgrade and negative outlook reflects our view of the interlinkages between the weakening operating and macroeconomic environment that could continue to negatively impact Dar Al Arkan. This follows the firm's weaker than anticipated financial performance in 2015 and we believe that market conditions will remain challenging over the coming 12 to 18 months," Rehan Akbar, Moody's assistant vice president, analyst and lead analyst for DAAR, said in a news release.

"Dar Al Arkan in our view will be able to adequately address its SAR 1.5 billion of debt maturities due in 2016 primarily through internal cash sources. The B1 rating also assumes that management will continue to pursue financial policies that build up cash buffers ahead of its SAR 3.9 billion in debt maturing in 2018 and 2019."

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