Fitch cuts two Dubai companies

Fitch Ratings said it downgraded two Dubai companies.

Dubai Holding Commercial Operations Group LLC's long-term issuer default rating was downgraded to BBB- from A-, senior unsecured rating to BBB- from A- and short-term issuer default rating to F3 from F2. The ratings are on Ratings Watch negative.

Dubai Electricity and Water Authority's long-term issuer default rating was downgraded to BBB- from A-, senior unsecured rating to BBB- from A-, short-term issuer default rating to F3 from F2 and AED3.2 billion 2013 sukuk issued by DEWA Funding Ltd. to BBB- from A-.

The above corporate entities have strong operational and strategic ties with the Dubai government and the downgrades reflect Fitch's reassessment of the ability of the Dubai government to support them, Fitch said.

This follows the Dubai Department of Finance's announcement of restructuring, which reflects a clearer delineation of support by the Dubai government for direct sovereign and indirect quasi sovereign obligations, the agency said.

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