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Sovereign-backed DEWA stays confident

Utility denies deadline for US$2bn bond payment next week

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Saeed Mohammed Al Tayer, CEO and managing director of DEWA.
Saeed Mohammed Al Tayer, CEO and managing director of DEWA.

Despite the ongoing fall-out over the Dubai World debt restructuring, Dubai Electricity & Water Authority (DEWA) has denied reports that it will be forced to make a US$2 billion bond payment next week, due to downgrades in the utility’s investment rating.

DEWA, unlike the Dubai World portfolio, has a sovereign guarantee, although this has not prevented a downgrade from Moody’s earlier this week.

“DEWA is very strong financially,” a spokesman told the National newspaper. “There has been no request [for the bond repayment] from banks.”

The payment concerns relates to a report that the company’s securitisation instrument, Thor Asset Purchase, might have to be redeemed in full next week.

The news came as DEWA has been reported to be preparing a US$2 billion bond issue in the first quarter of next year, although the utility has not confirmed this.

Earlier this week, Sheikh Maktoum Hasher Maktoum Al Maktoum, a prominent UAE businessman, said that he had recently invested in DEWA and chided ratings agencies for their past mistakes.

Moody’s has again hit the headlines by putting all government-related issuers (GRIs) in the UAE on review for possible downgrade. The scope of this decision includes firms such as Abu Dhabi’s Mubadala, Abu Dhabi National Energy Company (TAQA), Dolphin Energy and International Petroleum Investment Company (IDIC).

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