Moody's comments on Emaar's share buyback announcement

Emaar has decided to repurchase up to a maximum of 10% of outstanding shares, which at current prices could result in a cash commitment of around $1.3bn.

Given Emaar's robust year-to-date results and the sizeable cash balances reported as of June 2008, which will be the primary source of funding for the programme, Moody's believes that the execution of the share repurchase programme can be accommodated within the current A3 rating.

Moody's anticipates that Emaar will continue to maintain a strong financial profile and that the adjusted debt to capitalisation ratio will remain below 30%, whilst retained cash flow to net debt will still comfortably exceed 35%, which is within Moody's expectations for the ratings.

However, Moody's highlights that the programme will reduce the company's flexibility to allocate liquidity to other initiatives, such as acquisitions.

Based in Dubai, United Arab Emirates (UAE), Emaar Properties PJSC ranks as the largest developer of condominiums and villas in the emirate.

The company's main shareholder is the government of Dubai, with a 32% stake.

In 2007, Emaar generated revenues of $4.8bn.