Dubai faces refinancing of state debt: Financial Times

Reuters , Tuesday 6 Dec 2011

Dubai is pursuing options for restructuring some bonds as the emirate and its state-related companies face $10 billion in debt repayments

Dubai has raised the prospect of restructuring some bonds next year as the emirate and its state-related companies face $10 billion in debt repayments, the Financial Times reported on Tuesday.

The newspaper said, without citing a source, that Dubai is pursuing other options, including raising $2 billion in funds from liquid local banks, as it helps government-related entities meet their obligations, including three bonds totalling $3.8 billion that mature during the course of next year.

"We are working hard to meet all our liabilities but times are different. We are more confident we can negotiate a commercial deal with bondholders," a senior government official is quoted as saying in the article.

The FT said a report published on Tuesday by the credit rating agency Moody's will say Dubai faces a period of risk in meeting debt repayments next year, despite an economic revival in trade and tourism.

The report will also warn against any bond refinancing that amounts to a default, saying this would damage fragile investor confidence in Dubai, according to the article.

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