Moody’s issues warning on Dubai companies

02 February 2009
US ratings agency Moody’s Investors Service has warned that it is reviewing the ratings of six Dubai-government related corporates which could lead to them being downgraded.

The ratings under threat are those of Dubai Holding, DP World, DIFC Investments, Dubai Electricity & Water Authority (Dewa), Jebel Ali Free Zone, and Emaar Properties. All are currently rated A1, except Emaar which is A3.

Philipp Lotter, corporate finance analyst at the firm, says the warning has come “as a reflection of where we in the economic cycle and Dubai’s role as primary supporter of these companies”.

He adds: “Dubai has been more heavily affected by the current crisis.”

Even with a two notch downgrade the companies would all remain investment grade.

Lotter adds that although Dubai has said it has $90bn in assets, without further information on how liquid those assets are the ability of the government to use them to support its companies cannot be taken for granted.

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