Dewa gets ratings boost from S&P
Dubai, October 31, 2012
Dubai Electricity and Water Authority's (Dewa) received a major boost from Standard & Poor's which raised the utility firm's ratings to 'BBB' on improved financial performance with a stable outlook.
The US ratings agency has revised Dewa's stand-alone credit profile (SACP) to 'bb' from 'bb-' stating that the company enjoys a "very high" likelihood of government support.
"Dewa continues to report improved financial performance, and we believe Dewa has a credible plan to refinance its upcoming 2013 debt maturities," said the statement.
"We are raising our long-term corporate credit rating on Dewa to 'BBB' from 'BBB-'. The outlook is stable, reflecting our expectation that Dewa will maintain FFO to debt of 20 to 25 per cent over 2012-2015," it added.
The S&P expects a 4 per cent combined power and water demand growth in Dubai over 2012-2014. "This, combined with a very healthy electricity reserve margin in the emirate, will likely limit the need for capital spending on new capacity over the same period under our base-case scenario," said the ratings agency.
"As a result, we believe Dewa's debt levels could reduce gradually over the medium term, supporting credit measures in line with our expectations for a "significant" financial risk profile," it added.-TradeArabia News Service