The actions on RasGas II, RasGas 3 and Nakilat follow Moody’s announcement on 4 March 2016 that the Aa2 government bond and issuer ratings of Qatar had been placed on review for downgrade. In its review of the government bond and issuer ratings, Moody’s will assess the extent of the impact of the further sharp fall in oil prices on Qatar’s economic performance and the balance sheet of its government in the coming years.

In particular, the review will allow Moody’s to determine the extent to which Qatar’s very significant financial buffers insulate it from the need to take a rating action to reflect the impact of the price shock.

The review of RasGas II, RasGas 3 and Nakilat reflects that each is a government related issuer (GRI). Their ratings benefit from Moody’s assumption of very high implicit government support and are currently positioned one notch below that of the Government of Qatar. The review will assess (1) the implications for the three issuers of the potential deterioration in the credit quality of the Government of Qatar, as reflected in the ongoing review of its ratings, and (2) the impact of a weakening economic environment on business profiles given sustained low oil prices, which could pressure the stand-alone credit quality, or baseline credit assessments (BCA), under Moody’s methodology for GRIs.

Moody’s expects to conclude the reviews within two months.

WHAT COULD CHANGE THE RATINGS OF RASGAS II, RASGAS 3 AND NAKILAT UP/DOWN

The Aa3 ratings of RasGas II, RasGas 3 and Nakilat could be confirmed if Qatar’s sovereign rating is confirmed. The ratings could be downgraded if Qatar’s sovereign rating is downgraded or if Moody’s concludes that the likelihood of the sovereign providing support in the future, should this become necessary, has reduced.

RATIONALE FOR AFFIRMING THE RATINGS OF DOLPHIN ENERGY AND RUWAIS POWER

The actions on Dolphin Energy and Ruwais Power follow Moody’s announcements (1) on 4 March 2016, that the Aa2 sovereign ratings of the Emirate of Abu Dhabi had been placed on review for downgrade, and (2) on 8 March 2016, that the Aa2 issuer rating of Mubadala Development Company PJSC (Mubadala, 100 per cent owned by the Government of Abu Dhabi) had been placed on review for downgrade. During the review of Abu Dhabi’s ratings,

Moody’s will assess the extent of the impact of the further sharp fall in oil prices on Abu Dhabi’s economic performance and the balance sheet of its government in the coming years. In particular, the review will allow Moody’s to determine the extent to which Abu Dhabi’s economic and fiscal strength and quite large financial buffers insulate it from the need to take a rating action to reflect the impact of the price shock.

Dolphin Energy’s senior debt rating benefits from Moody’s assumption of very high implicit support from Mubadala given the project’s strategic importance to the Government of Abu Dhabi. In particular, the rating incorporates three notches of uplift to reflect this strategic importance and the benefits, including support, of Mubadala’s 51 per cent ownership. The rating affirmation reflects that Dolphin Energy’s A1 rating could accommodate some deterioration in the credit quality of Mubadala.

Ruwais Power’s senior bond rating benefits from around one notch of uplift for potential shareholder support. This uplift reflects Moody’s expectation of extraordinary shareholder support for the project should it become necessary and takes into account the strength of the project sponsors, the importance of continuing power and water supply in the region and the extraordinary support previously provided to key entities in Abu Dhabi. The rating affirmation reflects the limited ratings uplift and sufficient headroom to accommodate a deterioration in the sovereign credit quality at the current rating level, taking into account the company’s ownership structure and the differential between the company and sovereign ratings.