Dubai's Dewa debunks debt repayment reports

State-owned utility Dubai Electricity & Water Autority (Dewa) rejected a report that credit downgrades of government-owned firms could lead to an accelerated payment clause for $2 billion of its debt.

"This is incorrect, people are speculating things that are not correct," the spokesman Abdullah Al Hajri said, adding that Dewa would make an official announcement if the situation evolved.

"Dewa is very strong financially. There has been no request from banks."

Moody's said in a report that Dewa could come under liquidity pressure. "The review of Dewa's ratings considers the potential for liquidity pressure due to the triggering of an acceleration clause on its 2 billion Receivables Securitisation Programme that is issued under Thor Asset Purchase Company Limited."

A report in Britain's Financial Times said that the three creditors holding the $2bn securitisation instrument maturing in 2036, are interested in waiving the accelerated payment clause triggered by the ratings downgrades.

Standard & Poor's, which downgraded its rating on the notes issued under Thor Asset Purchase from BB+ to A- on December 3, said its action reflects an understanding that a rating trigger leads to an acceleration on December 14, 2009.