Moody's cuts two Dubai companies

Moody's Investors Service said it concluded its review of the ratings of six government-related issuers in Dubai and has taken multiple rating actions resulting in confirmations of four companies and downgrades on two companies.

The outlook on all ratings is negative.

Companies whose ratings were confirmed are DP World (rated A1), Dubai Electricity & Water Authority (rated A1), Jebel Ali Free Zone (rated A1) and DIFC Investments (rated A1).

Companies whose ratings were downgraded are Dubai Holding Commercial Operations Group, downgraded to A2 from A1; and Emaar Properties, downgraded to Baa1 from A3.

The actions conclude Moody's review of all six companies, whose ratings were placed on review for downgrade in February.

Moody's said the recent provision of federal funds to Dubai in the form of a $10 billion bond as part of a $20 billion program has provided greater assurances to the market of financial support from the government.

But concerns include Dubai's vulnerability in the current global economic environment given its reliance on volatile sectors such as real estate, trade, financial services and tourism, as well as burgeoning debt and refinancing challenges, the agency added.

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