Fitch downgrades Emirates Telecom Corp.'s IDR to 'A+'; removes negative watch

The rating has simultaneously been removed from Rating Watch Negative (RWN), and the agency has assigned a Stable Outlook.

Etisalat has strong operational and strategic ties with the UAE government and the downgrade reflects Fitch's revised view of the UAE sovereign's ability to support federal government entities. This is due to the increasing demands on the sovereign's relatively small fiscal resources to support UAE banks and, potentially, other entities during the current period of economic stress.

Fitch's view is that the credit profile of the sovereign entity has weakened and there is uncertainty as to how any government support may be provided. Fitch notes that the downgrade is not related to the operational performance or financial standing of Etisalat.

The rating of Etisalat had been placed on Rating Watch Negative on 24 September 2009 while further clarification on support mechanisms was sought (see 'Fitch Downgrades one UAE and two Dubai Corporates' RAC on 24 September 2009 on www.fitchratings.com).