S&P cuts Dubai company ratings

[December 03, 2009]  CAIRO (AP) -- International ratings agency Standard & Poor's says it has cut the ratings of six Dubai government-backed entities to junk status amid worries about the emirate's willingness to back its indebted companies.

S&P said in a statement Thursday that the downgrades reflect its view that the Dubai, while committed to backing its government-backed companies, "does not consider (their) credit standing or financial obligations as its priority responsibilities."

The moves come as Dubai World, the emirate's biggest conglomerate, is looking to restructure roughly $26 billion of its $60 billion in debt.

The news has sparked fears that heavily indebted Dubai could default on its debt obligations, estimated to be as high as $100 billion.

[Associated Press]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.