The ratings agency Standard & Poor's has cut the credit rating of six Dubai companies linked to the government to junk status.
S&P said extraordinary support from the Dubai government seemed "low" after the emirate said it would not guarantee Dubai World's debts.
Last week, state-owned Dubai World rocked financial markets after asking for a delay on repaying its debt.
S&P said it was not rating Dubai World or its property arm Nakheel.
It said that under its criteria, a credit standstill - which is what Dubai World had asked for - "is considered a default".
The firms downgraded were the ports operator DP World, DIFC Investments, Jebel Ali Free Zone, Dubai Multi Commodities Centre Authority, Dubai Holding Commercial Operations Group and Emaar Properties PJSC.
In addition, the rating on four banks was cut to junk. They were Emirates Bank International, National Bank of Dubai, Mashreqbank and Dubai Islamic Bank.
S&P said this was because of their high exposure to government-related entities (GREs).
Separately, the Financial Times reported that Britain's banks were Dubai's biggest foreign creditors.
The report said Royal Bank of Scotland had the biggest exposure, of up to $2bn. HSBC, Standard Chartered and Lloyds Banking Group had exposure of about $1bn each, according to the paper.