RIYADH: The global credit rating agency Moody’s has affirmed the ratings of the Dubai Electricity and Water Authority following the company’s initial public offering announcement.
The affirmation included Baa2 long-term issuer ratings and Baa2 Baseline Credit Assessment, while the outlook remains stable, it said in a statement.
Despite the weakening of DEWA’s financial profile after introducing increased leverage and a more consistent and higher dividend payment policy, the authority remains consistent with a Baa2 rating level, Moody’s explained.
The authority has committed to pay dividends of at least 6.2 billion dirham ($1.6 billion) per year for the next five years, which is over three times the average amount distributed in the past five years — 2 billion dirhams.
Moody’s added that the listing will improve DEWA’s disclosures and oversight and could lead to a more stable financial policy over time.
DEWA plans to raise up to $2.2 billion in Dubai’s first-ever IPO of a state-owned entity.
The IPO comes as part of countrywide plans to list ten state-owned companies in a bid to revive activity on its stock market.
