Lowest Investment Grade at Fitch received by Dubai Electricity Bonds
The Fitch Rating gave the lowest investment grade to Dubai Electricity and Water Authority's five-year $1 billion bond issue. This clearly shows the plunge in the creditworthiness of the emirate.
The new debt BBB, was rated by Fitch, and placed it on Rating Watch Negative. After the state-owned holding company Dubai World roiled global markets in November by proposing to freeze its loan repayments, DEWA became the Dubai's first government-owned entity to tap debt investors.
Fitch said, "DEWA's ratings remain aligned with the creditworthiness of Dubai. DEWA's ratings are also supported by its monopolistic market position, improving efficiency levels and modern asset base."
Yesterday, DEWA's new 8.5 percent bonds were sold off, which were part of a $3 billion medium-term note program to fund expansion.
Meanwhile, DEWA's debt was rated Ba2 by Moody's Investors Service, two levels below investment-grade status.
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