Moody's affirms Dar Al Arkan ratings, ‘Stable’ outlook
DAR ALARKAN
4300 -0.63% 18.87 -0.12
Riyadh – Mubasher: Moody's Ratings has affirmed the ‘B1’ long-term corporate family rating (CFR) and ‘B1-PD’ probability of default rating (PDR) of the Saudi listed Dar Al Arkan Real Estate Development Company.
The agency also affirmed the ‘(P)B1’ senior unsecured MTN rating of Dar Al Arkan Sukuk Company Ltd.'s trust certificate issuance program and ‘B1’ backed senior unsecured ratings of its Sukuk certificates.
Moody’s said the outlooks for both entities remain ‘Stable’, according to a recent official statement.
“The stable outlook reflects our expectation that Dar Al Arkan will be able to improve its interest coverage over time and will continue to manage its liquidity prudently,” Moody’s said.
Given the ongoing conflict in the region, Moody’s stated that the rating action is predicated upon its baseline scenario which assumes a short-lived conflict in the Middle East, likely a matter of weeks. Nevertheless, the agency recognizes that Dar Al Arkan operates in an industry that is materially highly exposed to a further deterioration in the Middle East conflict, which may have more consequential impact on its creditworthiness.
Ratings Change Factors
Moody’s noted that it could upgrade Dar Al Arkan's rating if its revenue and EBITDA become more predictable and stable, its debt/book capitalization declines to the mid-20s in percentage terms and its EBIT interest coverage trends above 3.0x on a sustainable basis, with all metrics are Moody's-adjusted, provided there is no significant deterioration in liquidity.
On the other hand, a downgrade to Dar Al Arkan’s rating would happen in case of a sustained weakness in the real estate market and macroeconomic environment in Saudi Arabia, or if the company's liquidity weakens ahead of its debt maturities, or if its debt/book capitalization increases above 35% and its EBIT interest coverage remains below 2.0x on a sustained basis, with all metrics are Moody's-adjusted.
Moody’s concluded: “We continue to monitor the impact of Iran's retaliatory response to US-Israel military strikes and increased geopolitical risk in the Middle East region. A downside scenario involving a more prolonged conflict that elevates risk of longer-term disruption of Dar Al Arkan's business profile, land and property development strategy could hurt EBITDA generation and therefore exert negative pressure on Dar Al Arkan's rating.”
It is worth noting that Dar Al Arkan Real fully redeemed its $400 million Islamic Sukuk in February 2026.
In mid-2025, the real estate company unveiled plans to issue a USD-fixed-rate, Sharia-compliant 'RegS' senior unsecured Sukuk in the global market.
As for the financial performance, Dar Al Arkan generated net profits of SAR 1.13 billion and revenue worth SAR 3.89 billion in 2025.
Source: Mubasher Source: {{details.article.source}}