Fitch monitoring DHCOG merger talks with Emaar Properties

As there is currently little detail on the structure, timing or likelihood of any potential transaction, Fitch does not intend to take any rating action at this time. However, the agency will closely monitor the transaction's possible evolution and evaluate the impact of any changes to DHCOG's business and financial profile. Rating actions could occur if the merger is executed.

DHCOG is in advanced talks to merge three of its development businesses - Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC - with Emaar. The latter is 32% owned by the Government of Dubai and is one of the largest property developers in the Middle East with total assets of Dhs61bn at 31 December 2008.

DHCOG's ratings are largely explained by its ownership structure (effectively 100% government-owned) and strategic position in the development of Dubai. Reflecting its strong sovereign linkage, DHCOG's ratings are consistent with Fitch's assessment of Dubai's creditworthiness.

On 25 June 2009 Fitch released a Special Report entitled 'Sovereign Ownership Impact on Corporate Ratings' which details how the agency rates corporate entities with sovereign shareholders.