Moody's upgrades DEWA rating

The progress of Dubai Electricity and Water Authority (DEWA) in tackling its debts has led to Moody's Investors Service upgrading the utility's rating.

Moody's Investors Service upgraded its outlook for the Dubai Electricity and Water Authority (DEWA) to positive today, saying the government-owned utility was making progress in addressing debts of about Dh4.4 billion due by next September.

"The change in outlook to positive reflects the constructive impact of DEWA's ongoing efforts to extend its debt maturity profile, thereby strengthening its liquidity profile," Moody's said.

DEWA raised $1 billion from investors in April, and added about $1.1bn of 12-year financing at the end of August.

The company is gearing up to raise additional money in a two-part bond, it was revealed last week. Despite the global economic slowdown, Moody's said DEWA's operating performance "held up reasonably well", with revenues and electricity demand higher in the first half of the year compared to the same period last year.

Its rating of Ba2 "could be upgraded over the medium term provided that DEWA continues to prudently manage its debt maturity profile, especially its upcoming debt maturities," Moody's said.