S&P cuts Private Department

S&P said it lowered its ratings for Private Department of Skh Mohamed Bin Khalid Al Nahyan LLC, its sukuk program and its outstanding sukuks to B+ from BB-.

Growing interest expense will lead to a deterioration of credit ratios for United Arab Emirates (UAE)-based Private Department of Skh Mohamed Bin Khalid Al Nahyan LLC (PD). Although we believe PD's revenue and EBITDA will increase as it delivers new assets in 2023, interest expense will expand to UAE dirham (AED) 200 million–AED 225 million in 2023 and EBITDA is expected to be AED 225 million–AED 235 million.

“We now expect the EBITDA interest coverage to be 1x-1.2x in 2023-2024, which aligns with our financial risk profile of highly leveraged,” S&P said in a press release.

The outlook is stable.

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