The Outlook remains Stable. The senior unsecured rating of Dubai Holding Commercial Operations MTN Limited's USD5bn debt issuance programme guaranteed by DHCOG is also affirmed at 'AA-' (AA minus).

The affirmation follows an announcement on 18 March 2007 that Dubai Holding ("DH", DHCOG's parent) is to acquire a 28% stake in Emaar Properties (Emaar) by acquiring 2.364 billion newly issued shares. Emaar is one of the other two government linked corporates in Dubai that is also involved in realising the strategic vision of Dubai's development. It is mainly involved in the development and sale of condominiums, villas and plots of land. Other business segments include property management, education, healthcare, hospitality and investment in financial services companies. Consolidated revenues in 2006 were just over AED14bn (USD3.8bn). Profit before tax was AED6.4bn or USD1.75bn.

The stake is to be wholly funded by DH swapping land with Emaar. No valuations have yet been publicised by DH of the land or shares acquired.

The Dubai government previously held 33% of Emaar. With DH being wholly privately owned by the ruler of Dubai, the combined stakes of the government and the ruler in Dubai will be around 51%.

In Fitch's view the transaction initiates collaborations between two companies that are integrally involved in the realisation of the strategic vision of Dubai. They can increase cooperation on projects and may derive synergies from working together. This factor has been one of the principal points that has supported DHCOG's 'AA-' rating along with its 100% ownership by the ruler of Dubai.The transaction links DH and Emaar closer together in these terms.

DHCOG is mainly active in the Dubai real estate, leisure and tourism sectors.