April 11 (Bloomberg) -- DP World Ltd., the Dubai government-controlled ports operator, had its credit ratings raised to investment grade from junk at Moody’s Investors Service, which cited a “rapid recovery” in performance.
The yield on the 6.25 percent 10-year Islamic bond dropped to the lowest on record. The long-term foreign currency and local currency debt ratings, which affect $3.25 billion of borrowings, were lifted one level to Baa3 from Ba1, Moody’s said in an e-mailed statement today. The outlook is stable.
The ratings “are sustained by the company’s diversified global operations, the expected growth in international container traffic as well as solid profitability and a strong liquidity profile,” Franck Nowak, associate analyst at Moody’s in Dubai, wrote in the statement.
DP World reported a better-than-expected 13 percent increase in full-year profit, helped by a rebound in global trade and improved profit margins. Net income rose to $374.8 million from $332.9 million a year earlier, the world’s fourth-biggest port operator said March 23. The company said volumes handled at its 28 terminals worldwide grew 9 percent in 2010 to 27.8 million twenty-foot-equivalent containers, as global trade recovered.
The yield on the $1.5 billion sukuk maturing in July 2017 dropped 15 basis points, or 0.15 percentage point, to 6.10 percent at 6:16 p.m. in Dubai. The shares rose 1.6 percent to 69 cents, the highest since September 2008.
DP World is expected to “remain within the boundaries of its leverage target by avoiding large acquisitions, and gradually improving cash generation,” Nowak wrote.
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