Moody's downgrades #Dubai utility DEWA to Baa2, outlook still negative - Reuters

Moody's downgrades Dubai utility DEWA to Baa2, outlook still negative - Reuters:

Moody’s on Wednesday downgraded the rating of Dubai Electricity & Water Authority (DEWA), the state-owned monopoly provider of electricity and water in Dubai, to Baa2 from Baa1 and maintained a negative outlook.

Many investors view the ratings of government-related entities in Dubai as an indicator of the government’s own credit profile as Dubai is not rated by any of the major ratings agencies.

“Moody’s expects the coronavirus outbreak will aggravate the structural slowdown in real GDP growth for the Emirate of Dubai, contributing to the further deterioration of fiscal strength of the government via increasing debt levels,” the rating agency said in a report.

“The downgrade also reflects the risk of sustained large dividend transfers from DEWA to the government of Dubai as a result of the deteriorating economic and fiscal health of the emirate.”