DUBAI, Nov 30 (Reuters) - Restructuring of Dubai World's liabilities is unlikely to threaten credit quality of the United Arab Emirates' federal government and the holder of most of its oil wealth Abu Dhabi, ratings agency Moody's said on Monday.
Dubai, the second-largest emirate of the oil exporter, rattled global markets last week when it asked for a repayment freeze on debt issued by two of its key developers.
Both the federal and Abu Dhabi governments are rated Aa2 with a stable outlook by Moody's.
The main factor underpinning the UAE's high investment-grade sovereign rating is its robust external position, largely due to the ample stock of offshore financial assets held by Abu Dhabi's sovereign wealth fund, the agency said.
Moody's also said the adverse impact of a Dubai World restructuring on the non-hydrocarbon sectors of the domestic economy could potentially be severe, especially in Dubai.

"However, overall macro-economic stability is protected by the country's strong net external creditor position that is bolstered by Abu Dhabi's accumulated oil wealth," said Tristan Cooper, head analyst for Middle East Sovereigns at Moody's in Dubai.
Dubai rocked the financial world on Nov. 25 when it said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree to a standstill on billions of dollars of debt as a first step to restructuring.

Moody's said that the Dubai World restructuring has effectively reduced the government's contingent liabilities by highlighting the limits of government support for indebted state-owned companies.
A top Dubai government official said on Monday there will be no government guarantee on Dubai World's debts, crushing earlier assumptions by creditors.
State-run Dubai World had $59 billion of liabilities as of August, a large proportion of Dubai's total debt of $80 billion and repayment of Nakheel's $3.5 billion worth of Islamic bonds, which were originally due to mature on Dec. 14, was widely expected by the market to be met.
Moody's said earlier on Monday contagion effects for Abu Dhabi, from restructuring of Dubai World debt will be "unavoidable" and could lead to rating downgrades for UAE banks.
(Reporting by Martin Dokoupil; Editing by Toby Chopra) Keywords: EMIRATES RATINGS/MOODY'S

(martin.dokoupil@reuters.com, +971 4 366 4221, Reuters Messaging: martin.dokoupil.reuters.com@reuters.net)

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