Moody's Investors Service said yesterday it has down-graded five Dubai state-linked companies, including Dubai Ports World, though the government would most likely bail them out if it was felt necessary.
The issuer and debt ratings of international port operator DP World, state utility Dubai Electricity and Water Author-ity (DEWA) and DIFC Invest-ments (DIFCI) all drop to A3 from A1, the credit ratings agency said.
Jebel Ali Free Zone (JAFZ) and Dubai Holding Comm-ercial Operations Group (DHCOG) also see their issuer and debt ratings fall to Baa1 from A3.
The ratings outlook for DP World, DEWA, DIFCI and JAFZ is negative, Moody's said in a report.
Issuer ratings for real estate giant Emaar Properties were maintained at Baa1, but its ratings remain on review for downgrade, along with those of DHCOG, according to yesterday's report.
"The main concern for Dubai going forward remains its high level of indebtedness, particularly that of its government-owned corporations," the report said.
"Whilst we understand that the government is under no legal obligation to support the vast majority of its GRI (government related issuers) debt, we believe that it is highly likely to stand behind its GRIs because of their strategic and reputational importance.
"Ratings could face further deterioration, if it became apparent that the government was either less willing or able to support its GRI over time," it added.
Dubai revealed last month that it has amassed debts of $71.3 billion to date.
© 7Days 2009
