dubai-world

Dubai World Creditors Agree to Restructure $23.5 Billion of Debt Payments

by on May 20, 2010

By Arif Sharif May 20 (Bloomberg) — Dubai World, the state-owned holding company, agreed “in principle” with a group of creditor banks on terms to restructure $14.4 billion of loans. Dubai World will pay $4.4 billion in five years and the remaining $10 billion in eight years, the company said in an e- mailed statement today. Banks will have the option to choose from combinations of loan maturities in dollar or dirhams that carry different interest rates. Including the Dubai government’s debt the total liabilities being restructured is $23.5 billion. Banks will be paid 1 percent interest on $4.4 billion of the loans maturing in five years. The lenders have three options in the eight-year maturities covering about $10 billion of debt with at least 1 percent interest and varying additional rates between 1.5 percent and 2.5 percent at maturity. Two of these options also have a shortfall guarantee. “The final proposal has not changed in its fundamentals from the terms announced on March 25. In particular, there is no additional financial support from the Government of Dubai,” it said. “The restructuring proposal requires the agreement of the rest of Dubai World’s financial creditors.” Dubai World’s coordination committee, which is negotiating with the company on behalf of more than 90 lenders, represents about 60 percent of its total bank loans, it said. The committee comprises Emirates NBD PJSC , Abu Dhabi Commercial Bank PJSC, Royal Bank of Scotland Group Plc, HSBC Holdings Plc , Lloyds Banking Group Plc, Standard Chartered Plc and Bank of Tokyo- Mitsubishi UFJ Ltd . “The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders,” Dubai World’s chief restructuring officer Aidan Birkett said in the statement. “It offers the company the ability to maximize the value of its assets over the medium to long term.” To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai World Creditors Agree to Restructure $23.5 Billion of Debt Payments

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Dubai World Creditors Agree in Principle on $23.5 Billion of Total Debt

by on May 19, 2010

By Arif Sharif May 20 (Bloomberg) — Dubai World and its creditors agreed in principle on a debt deal, a statement from the company said. To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai World Creditors Agree in Principle on $23.5 Billion of Total Debt

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Dubai Shares Drop on Concern With Dubai World Interest Proposal, Goldman

April 18, 2010

By Dana El Baltaji April 18 (Bloomberg) — Dubai’s stocks fell the most this month on concern Dubai World is offering creditors interest that is about a fifth of the market rate and after global markets slumped on fraud allegations at Goldman Sachs Group Inc. Arabtec Holding PJSC slipped the most since February after a unit of the construction company won’t bid for a contract to build a 1.1 kilometer (0.68-mile) skyscraper in Saudi Arabia. Emaar Properties PJSC retreated 3.9 percent. The Dubai Financial Market General Index lost 2.3 percent, the biggest drop since March 29, to 1,775.56 at the close in Dubai. Saudi Arabia’s Tadawul All Share Index fell 0.9 percent at 1:48 p.m. in Riyadh. Dubai World, the state-owned holding company restructuring $24.8 billion of debt, is offering to pay creditors 1 percent interest on new loans as part of a restructuring plan, a banker familiar with the plan said April 15. Banks are reluctant to accept the new rate presented on March 25 as it is lower than the market rate of about 5 percent and would force Dubai World’s creditors to book impairment provisions, two bankers said. “A 1 percent interest on the restructured amount is not in the best interest of anyone,” said Marwan Shurrab , assistant fund manager and chief trader at Gulfmena Alternative Investments in Dubai. “It would hurt banks and force them to make more provisions, which will affect their results.” A spokesman for Dubai World declined to comment when contacted on April 15. Withdrawing Offer U.S. stocks fell on April 16, halting the longest rally in a year, after allegations of fraud at Goldman heightened concern the government will crack down on Wall Street. Arabtec tumbled 5.6 percent, the most since Feb. 14, to 2.51 dirhams. The plan was withdrawn for “various reasons associated with the requirements of the Kingdom Tower,” Arabtec said in a statement read over the phone to Bloomberg News today. Arabtec Construction had planned to submit a proposal for Kingdom Tower with its South Korean partner Samsung Corp . this month, The National reported earlier. Emaar, the developer of the world’s tallest tower in Dubai, fell to 3.90 dirhams. Dubai Islamic Bank PJSC , the United Arab Emirates’ biggest Islamic lender, retreated to the lowest level in a month, falling 3.8 percent to 2.29 dirhams. Abu Dhabi’s measure declined 1 percent, the most in more than two weeks, on concern a cloud of ash from volcanic eruptions in Iceland will disrupt flights to and from Abu Dhabi ahead of a real estate exhibition in the emirate this week. The number of people attending the property exhibition in Abu Dhabi is likely to drop because of flight cancelations, said Majed Azzam , a real estate analyst at Al-Futtaim HC Securities. Aldar Properties PJSC , Abu Dhabi’s biggest real-estate developer, fell 4.8 percent, the most since Jan. 26, to 4.20 dirhams and Sorouh Real Estate Co. lost 2.9 percent to 2.38 dirhams. Iceland’s Volcano “There’s a lot of foreign ownership in Aldar and Sorouh,” Azzam said. “Whenever there is bad or good news globally, the stocks tend to overreact. Even though the property conference is directed more at Asian investors than the European market, the ash cloud doesn’t help sentiment.” Northern and central Europe may remain closed to air traffic until April 22 as winds push ash from volcanic eruptions in Iceland across the continent, forecasters said. European airlines canceled more than 77 percent of their flights yesterday as airports from Dublin to Moscow closed. The Muscat Securities Market 30 Index fell 0.4 percent and the Bahrain All Share Index retreated 0.3 percent. Qatar ’s gauge declined 1 percent and Kuwait’s measure was little unchanged. To contact the reporter responsible for this story: Dana El Baltaji in Dubai delbaltaji@bloomberg.net .

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Dubai World Said to Offer a Shortfall Guarantee in $14.2 Billion Debt Plan

March 29, 2010

By Arif Sharif March 29 (Bloomberg) — Dubai World, the state-owned holding company seeking to restructure $14.2 billion of debt, offered creditors a so-called shortfall guarantee as part of a repayment plan, a person close to the Dubai government said. If the sale of Dubai World’s assets does not generate sufficient cash to repay loans, the government will make up the shortfall up to a certain level, said the person, who declined to be identified because the discussions are private. The guarantee clause was not outlined in Dubai World’s press statement on March 25 when the restructuring plan was announced. Dubai World, one of the emirate’s three main state-owned holding companies, and its property unit Nakheel PJSC are seeking to renegotiate terms on $24.8 billion of debt after the global credit crisis battered Dubai’s property market and hurt the ability of the emirate’s companies to raise loans. The Dubai government and its state-owned companies racked up $109.3 billion of debt, according to International Monetary Fund estimates, as the emirate sought to transform into a tourism, trade and financial services hub. Dubai World asked creditors March 25 to roll over outstanding debt into two new loans of five year and eight year maturities. Lenders will be paid their principal in full, although the interest rate on the loans is still being negotiated with the banks, Dubai World Chief Restructuring Officer Aidan Birkett said that day. Interest Rate Dubai World’s creditors will be paid interest below the market rate in cash, although that will be supplemented by a so- called payment-in-kind element, the person said. The person did not specify how much the payment-in kind was. Nakheel’s creditors were asked to extend loan maturities at interest rates linked to the Emirates interbank offered rate and the London interbank offered rate. Two of Nakheel’s Islamic bonds, which together raised $1.73 billion, will be paid in full when they mature this year and in 2011. The treatment of Dubai World and Nakheel’s creditors reflects the different levels of security and the legal positions of each creditor class, the person said. Dubai World’s lenders are unsecured, while lenders to Nakheel have recourse to the company’s assets, the person said. A spokesman for Dubai World declined to comment when contacted by Bloomberg News today. To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai Shares Rise to Three-Month High on Debt-Plan Optimism; Arabtec Gains

March 28, 2010

By Zahra Hankir March 28 (Bloomberg) — Dubai shares gained for a second day, rising to the highest level this year, as the emirate said it will support Dubai World’s $24.8 billion debt restructuring. Arabtec Holding Co., the United Arab Emirates’ biggest construction company, increased the most in almost three months on improved sentiment following the announcement. Emirates NBD PJSC, the U.A.E.’s largest bank by assets, climbed for a seventh day after saying it may sell debt when the restructuring is complete. The DFM General Index rose 1.9 percent to 1,880.62, the highest since Dec. 16. Abu Dhabi’s ADX General Index rose 0.9 percent to 2,929.32, the highest since Nov. 18. Dubai shares jumped 4.3 percent on March 25 after the government said it will support state-owned Dubai World with as much as $9.5 billion, doubling to $20 billion the amount the emirate paid to holding company. Lenders to Dubai World will be repaid their principal in full by swapping loans with two tranches of new debt with five and eight-year maturities, according to the proposal. Today’s move “is a follow through from last Thursday’s announcement on the Dubai World restructuring, which was above expectations as it addressed the concerns of customers, trade creditors and sukuk holders, other than just the financial creditors,” said Yong Wei Lee, senior fund manager at Emirates NBD Asset Management. “Institutional investors who have been significantly underweight the U.A.E are most likely to increase their weighting in the market,” said Lee, who oversees around $200 million for Middle East North Africa equity funds. Nakheel’s Restructuring Dubai World’s property unit Nakheel PJSC will receive $8 billion in funding and $1.2 billion by converting government debt to equity. Dubai World and its property units Nakheel and Limitless LLC used loans to finance real-estate projects such as palm-shaped islands off the emirate’s coast, which they struggled to refinance after the credit crunch made banks reluctant to lend. The sheikhdom will supply Dubai World with $1.5 billion to support its new business plan and will convert $8.9 billion in debt to equity. Arabtec jumped 12 percent to 2.59 dirhams, the biggest increase since Dec. 28. “Thursday’s news sent a wave of optimism in the market that the cash flow cycle of contractors might improve,” said Ismail Sadek , a Cairo-based analyst at Beltone Financial. Arabtec is owed a “significant portion” of its total 4.6 billion dirhams ($1.25 billion) of receivables from Nakheel, Sadek said. Nakheel had delayed payments to contractors and suppliers causing Arabtec to stop work at its Al Furjan project earlier this year after building 550 villas at the project, which was designed to include 4,000 homes. Arabtec Upgrade Separately, Arabtec was raised to “outperform” from “market perform” with a price estimate of 3.20 dirhams at Al Mal Capital. Emirates NBD increased 3.6 percent to 3.17 dirhams, the highest since Dec. 21. The biggest bank in Dubai plans to sell debt after the restructuring is complete, Chairman Ahmed Bin Humaid Al Tayer said March 25. Qatar’s measure advanced 0.7 percent to 7,465.08, the highest since Oct. 11. The Kuwait Stock Exchange Index fell 0.3 percent. Oman’s MSM30 Index rose 0.5 percent. Bahrain’s measure retreated 1.3 percent and Saudi Arabia’s Tadawul All Share Index dropped 0.1 percent. To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

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Dubai Shares Rise to Three-Month High on Debt-Plan Optimism; Arabtec Gains

March 28, 2010

By Zahra Hankir March 28 (Bloomberg) — Dubai shares gained for a second day, rising to the highest level this year, as the emirate said it will support Dubai World’s $24.8 billion debt restructuring. Arabtec Holding Co., the United Arab Emirates’ biggest construction company, increased the most in almost three months on improved sentiment following the announcement. Emirates NBD PJSC, the U.A.E.’s largest bank by assets, climbed for a seventh day after saying it may sell debt when the restructuring is complete. The DFM General Index rose 1.9 percent to 1,880.62, the highest since Dec. 16. Abu Dhabi’s ADX General Index rose 0.9 percent to 2,929.32, the highest since Nov. 18. Dubai shares jumped 4.3 percent on March 25 after the government said it will support state-owned Dubai World with as much as $9.5 billion, doubling to $20 billion the amount the emirate paid to holding company. Lenders to Dubai World will be repaid their principal in full by swapping loans with two tranches of new debt with five and eight-year maturities, according to the proposal. Today’s move “is a follow through from last Thursday’s announcement on the Dubai World restructuring, which was above expectations as it addressed the concerns of customers, trade creditors and sukuk holders, other than just the financial creditors,” said Yong Wei Lee, senior fund manager at Emirates NBD Asset Management. “Institutional investors who have been significantly underweight the U.A.E are most likely to increase their weighting in the market,” said Lee, who oversees around $200 million for Middle East North Africa equity funds. Nakheel’s Restructuring Dubai World’s property unit Nakheel PJSC will receive $8 billion in funding and $1.2 billion by converting government debt to equity. Dubai World and its property units Nakheel and Limitless LLC used loans to finance real-estate projects such as palm-shaped islands off the emirate’s coast, which they struggled to refinance after the credit crunch made banks reluctant to lend. The sheikhdom will supply Dubai World with $1.5 billion to support its new business plan and will convert $8.9 billion in debt to equity. Arabtec jumped 12 percent to 2.59 dirhams, the biggest increase since Dec. 28. “Thursday’s news sent a wave of optimism in the market that the cash flow cycle of contractors might improve,” said Ismail Sadek , a Cairo-based analyst at Beltone Financial. Arabtec is owed a “significant portion” of its total 4.6 billion dirhams ($1.25 billion) of receivables from Nakheel, Sadek said. Nakheel had delayed payments to contractors and suppliers causing Arabtec to stop work at its Al Furjan project earlier this year after building 550 villas at the project, which was designed to include 4,000 homes. Arabtec Upgrade Separately, Arabtec was raised to “outperform” from “market perform” with a price estimate of 3.20 dirhams at Al Mal Capital. Emirates NBD increased 3.6 percent to 3.17 dirhams, the highest since Dec. 21. The biggest bank in Dubai plans to sell debt after the restructuring is complete, Chairman Ahmed Bin Humaid Al Tayer said March 25. Qatar’s measure advanced 0.7 percent to 7,465.08, the highest since Oct. 11. The Kuwait Stock Exchange Index fell 0.3 percent. Oman’s MSM30 Index rose 0.5 percent. Bahrain’s measure retreated 1.3 percent and Saudi Arabia’s Tadawul All Share Index dropped 0.1 percent. To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

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Stocks, Euro Gain, Dubai Swaps Plunge as Debt Concern Eases

March 25, 2010

By Gavin Serkin March 25 (Bloomberg) — Stocks rallied and the euro snapped a two-day slide against the dollar as Germany backed a Greek aid proposal and forecasts at Qualcomm Inc. and Best Buy Co. topped estimates. The cost to protect Dubai against a default slid as the emirate committed $9.5 billion to restructure Dubai World. The MSCI World Index gained 0.5 percent and the Standard & Poor’s 500 Index rose 0.7 percent at 10 a.m. in New York, returning to an 18-month high after yesterday’s retreat. The DFM General Index of Dubai shares jumped 4.3 percent, the most since December. The euro strengthened as much as 0.4 percent against the dollar, rebounding from a 10-month low. German Chancellor Angela Merkel said she’ll recommend to European leaders that Greece be pledged International Monetary Fund assistance and bilateral aid to tackle the region’s biggest deficit. The Dubai government’s promise to support the state- owned holding company eased concern of a default four months after plans to delay debt payments roiled markets. Qualcomm’s forecast sent S&P 500 technology shares up 1.1 percent. “Governments are moving toward solutions to stop wholesale collapse in the short term,” said Mark Schofield , head of fixed-income strategy at Citigroup Global Markets Ltd. in London. “There’s a structural desire to stabilize the fiscal environment.” The S&P 500 climbed above its highest close since September 2008 as Citigroup Inc. rose 2.7 percent to help lead financial shares higher. The U.S. Treasury intends to unload its 27 percent stake in the bailed-out bank using a preset trading plan that will lock the government into a schedule for selling its shares, people with direct knowledge of the matter said. Best Buy Rallies Best Buy Co. jumped 8.6 percent after fourth-quarter profit and its full-year earnings forecast topped analyst estimates. U.S. stocks also gained as initial jobless claims fell to the lowest level in six weeks as the rebound in the economy encourages companies to make fewer cuts in payrolls. First-time jobless applications declined by 14,000 to 442,000 in the week ended March 20, lower than anticipated, Labor Department figures showed today. Abu Dhabi’s ADX General Index gained 1.1 percent and Poland’s WIG20 Index advanced 1.8 percent. Credit default swaps linked to Dubai fell 40 basis points to 382.9 basis points as of 12:20 p.m. in London, according to prices provided by CMA DataVision. Europe, Asian Shares Europe’s Stoxx 600 Index rose to the highest level in 18 months. Hochtief AG, Germany’s biggest construction company, gained 4.4 percent in Frankfurt after posting earnings that beat analysts’ estimates. Next Plc, the U.K.’s second-biggest clothing retailer, surged 5.3 percent in London after boosting its dividend and reporting better-than-estimated profit. The MSCI Asia Pacific Index slipped less than 0.1 percent. Li & Fung, a trading company that supplies Wal-Mart Stores Inc., slumped 11 percent in Hong Kong, while Unicom, China’s No. 2 mobile-phone company, sank 4.1 percent. The euro strengthened versus the dollar for the first time in three days, climbing as much as 0.4 percent to $1.3371. European Central Bank President Jean-Claude Trichet said the bank will extend its emergency collateral rules beyond 2010, softening his stance as Greece struggles to cut a budget deficit that is 12.9 percent of gross domestic product. European Union leaders are meeting in Brussels as Germany tries to end haggling over an aid package for Greece, whose budget deficit is more than four times the EU’s limit. Greek bonds rose, with the two-year note yield dropping 21 basis points to 4.8 percent. ‘Very Generous’ Dubai’s government said in a statement it will supply Dubai World with $1.5 billion and convert $8.9 billion in debt to equity. Nakheel PJSC will receive $8 billion in funding and $1.2 billion through a debt swap. Nakheel’s bank creditors will be asked to restructure loans to the company at commercial rates. Dubai’s announcement “surpasses my expectations, it’s very generous,” said Daniel Broby , chief investment officer at SilkInvest Ltd., a London-based investment firm that holds bonds of the Dubai World unit Nakheel PJSC. “This is what it takes to get the U.A.E. and Dubai back on its feet again.” Concern that the fallout from the global financial crisis may leave some countries unable to pay their debts was reignited after Dubai World said Dec. 1 it wanted to restructure $26 billion of securities. Treasuries were little changed before congressional testimony from Federal Reserve Chairman Ben S. Bernanke and a $32 billion auction of seven-year notes as some investors bet yesterday’s surge in yields was unjustified. The yield on the benchmark 10-year note was 3.86 percent after jumping 17 basis points yesterday. Crude oil for May delivery rose 0.7 percent to $81.15 a barrel in New York. To contact the reporters on this story: Gavin Serkin at gserkin@bloomberg.net

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Stocks Rally, Euro Gains as Merkel Backs Greek Aid; Dubai Debt Risk Slumps

March 25, 2010

By Gavin Serkin March 25 (Bloomberg) — Stocks rallied and the euro snapped a two-day slide against the dollar as Germany backed a Greek aid proposal and forecasts at Qualcomm Inc. and Best Buy Co. topped estimates. The cost to protect Dubai against a default slid as the emirate committed $9.5 billion to restructure Dubai World. The MSCI World Index gained 0.5 percent and the Standard & Poor’s 500 Index rose 0.7 percent at 10 a.m. in New York, returning to an 18-month high after yesterday’s retreat. The DFM General Index of Dubai shares jumped 4.3 percent, the most since December. The euro strengthened as much as 0.4 percent against the dollar, rebounding from a 10-month low. German Chancellor Angela Merkel said she’ll recommend to European leaders that Greece be pledged International Monetary Fund assistance and bilateral aid to tackle the region’s biggest deficit. The Dubai government’s promise to support the state- owned holding company eased concern of a default four months after plans to delay debt payments roiled markets. Qualcomm’s forecast sent S&P 500 technology shares up 1.1 percent. “Governments are moving toward solutions to stop wholesale collapse in the short term,” said Mark Schofield , head of fixed-income strategy at Citigroup Global Markets Ltd. in London. “There’s a structural desire to stabilize the fiscal environment.” The S&P 500 climbed above its highest close since September 2008 as Citigroup Inc. rose 2.7 percent to help lead financial shares higher. The U.S. Treasury intends to unload its 27 percent stake in the bailed-out bank using a preset trading plan that will lock the government into a schedule for selling its shares, people with direct knowledge of the matter said. Best Buy Rallies Best Buy Co. jumped 8.6 percent after fourth-quarter profit and its full-year earnings forecast topped analyst estimates. U.S. stocks also gained as initial jobless claims fell to the lowest level in six weeks as the rebound in the economy encourages companies to make fewer cuts in payrolls. First-time jobless applications declined by 14,000 to 442,000 in the week ended March 20, lower than anticipated, Labor Department figures showed today. Abu Dhabi’s ADX General Index gained 1.1 percent and Poland’s WIG20 Index advanced 1.8 percent. Credit default swaps linked to Dubai fell 40 basis points to 382.9 basis points as of 12:20 p.m. in London, according to prices provided by CMA DataVision. Europe, Asian Shares Europe’s Stoxx 600 Index rose to the highest level in 18 months. Hochtief AG, Germany’s biggest construction company, gained 4.4 percent in Frankfurt after posting earnings that beat analysts’ estimates. Next Plc, the U.K.’s second-biggest clothing retailer, surged 5.3 percent in London after boosting its dividend and reporting better-than-estimated profit. The MSCI Asia Pacific Index slipped less than 0.1 percent. Li & Fung, a trading company that supplies Wal-Mart Stores Inc., slumped 11 percent in Hong Kong, while Unicom, China’s No. 2 mobile-phone company, sank 4.1 percent. The euro strengthened versus the dollar for the first time in three days, climbing as much as 0.4 percent to $1.3371. European Central Bank President Jean-Claude Trichet said the bank will extend its emergency collateral rules beyond 2010, softening his stance as Greece struggles to cut a budget deficit that is 12.9 percent of gross domestic product. European Union leaders are meeting in Brussels as Germany tries to end haggling over an aid package for Greece, whose budget deficit is more than four times the EU’s limit. Greek bonds rose, with the two-year note yield dropping 21 basis points to 4.8 percent. ‘Very Generous’ Dubai’s government said in a statement it will supply Dubai World with $1.5 billion and convert $8.9 billion in debt to equity. Nakheel PJSC will receive $8 billion in funding and $1.2 billion through a debt swap. Nakheel’s bank creditors will be asked to restructure loans to the company at commercial rates. Dubai’s announcement “surpasses my expectations, it’s very generous,” said Daniel Broby , chief investment officer at SilkInvest Ltd., a London-based investment firm that holds bonds of the Dubai World unit Nakheel PJSC. “This is what it takes to get the U.A.E. and Dubai back on its feet again.” Concern that the fallout from the global financial crisis may leave some countries unable to pay their debts was reignited after Dubai World said Dec. 1 it wanted to restructure $26 billion of securities. Treasuries were little changed before congressional testimony from Federal Reserve Chairman Ben S. Bernanke and a $32 billion auction of seven-year notes as some investors bet yesterday’s surge in yields was unjustified. The yield on the benchmark 10-year note was 3.86 percent after jumping 17 basis points yesterday. Crude oil for May delivery rose 0.7 percent to $81.15 a barrel in New York. To contact the reporters on this story: Gavin Serkin at gserkin@bloomberg.net

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Stocks Rally, Euro Gains as Merkel Banks Greek Aid; Dubai Debt Risk Slumps

March 25, 2010

By Gavin Serkin March 25 (Bloomberg) — Stocks rallied and the euro snapped a two-day decline against the dollar as Germany backed a Greek rescue proposal. The cost to protect Dubai’s debt against a default plunged after the emirate committed $9.5 billion to Dubai World’s restructuring. The DFM General Index of Dubai shares jumped 4.3 percent and credit default swaps linked to the emirate’s debt fell 53.8 basis points to 368.9 basis points at 10:50 a.m. in London. Both were the biggest moves since Dec. 15. The Stoxx Europe 600 Index advanced 0.5 percent and futures on the Standard & Poor’s 500 Index gained 0.3 percent. The euro strengthened as much as 0.3 percent against the dollar, rebounding from a 10-month low. Chancellor Angela Merkel said she’ll recommend to European leaders meeting in Brussels today that Greece be pledged International Monetary Fund assistance and bilateral aid to tackle the region’s biggest deficit. In Dubai, the government promised to support the state-owned holding company, easing concern of a default four months after plans to delay debt payments roiled world markets. “Governments are moving toward solutions to stop wholesale collapse in the short term,” said Mark Schofield , head of fixed-income strategy at Citigroup Global Markets Ltd. in London. “There’s a structural desire to stabilize the fiscal environment.” Abu Dhabi Gains Abu Dhabi’s ADX General Index gained 1.3 percent and Poland’s WIG20 Index advanced 1.2 percent. Dubai five-year credit-default swaps are trading at the lowest level since November, according to prices from CMA DataVision and Bloomberg. Europe’s Stoxx 600 rose to the highest level in 18 months. Hochtief AG, Germany’s biggest construction company, gained 3.9 percent in Frankfurt after posting earnings that beat analysts’ estimates. Next Plc, the U.K.’s second-biggest clothing retailer, surged 5.2 percent in London after boosting its dividend and reporting better-than-estimated profit. The MSCI World Index advanced 0.1 percent and the MSCI Asia Pacific Index slipped less than 0.1 percent. Li & Fung, a trading company that supplies Wal-Mart Stores Inc., slumped 9.9 percent, while Unicom, China’s No. 2 mobile-phone company, sank 4.1 percent in Hong Kong. U.S. futures gained after the S&P 500 yesterday dropped 0.6 percent. Fewer Americans filed first-time claims for jobless benefits last week, economists said before a Labor Department report due at 8:30 a.m. in Washington. Euro Appreciates The euro strengthened versus the dollar for the first time in three days, reaching $1.3339 after $1.3284. European Central Bank President Jean-Claude Trichet said the bank will extend its emergency collateral rules beyond 2010, softening his stance as Greece struggles to cut a budget deficit that is 12.9 percent of gross domestic product. European Union leaders are meeting in Brussels as Germany tries to end haggling over an aid package for Greece, whose budget deficit is more than four times the EU’s limit. Greek bonds rose, with the two-year note yield dropping 18 basis points to 4.98 percent. The $750 million Islamic bond, or sukuk, of Nakheel PJSC, a Dubai World unit, surged 27 cents 91.5 cents on the dollar. The emirate’s government said in a statement it will supply Dubai World with $1.5 billion and convert $8.9 billion in debt to equity. Nakheel will receive $8 billion in funding and $1.2 billion through a debt swap. Nakheel’s bank creditors will be asked to restructure loans to the company at commercial rates. ‘Very Generous’ Dubai’s announcement “surpasses my expectations, it’s very generous,” said Daniel Broby , chief investment officer at SilkInvest Ltd., a London-based investment firm that holds bonds of the Dubai World unit Nakheel PJSC. “This is what it takes to get the U.A.E. and Dubai back on its feet again.” Concern that the fallout from the global financial crisis may leave some countries unable to pay their debts was reignited after Dubai World said Dec. 1 it wanted to restructure $26 billion of securities. Treasuries advanced, paring a decline yesterday that sent the 10-year yield to the highest level since January as demand at an auction from a group of investors that includes foreign banks fell to the lowest level in eight months. The yield slipped 3 basis points today to 3.83 percent. The 10-year U.S. swap spread was minus 9.2 basis points today. It turned negative for the first time on record three days ago. Crude oil for May delivery was little changed at $80.78 a barrel, 17 cents up, on the New York Mercantile Exchange. To contact the reporters on this story: Gavin Serkin at gserkin@bloomberg.net

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Dubai World to Get $9.5 Billion of Government Funding to Restructure Debt

March 25, 2010

By Arif Sharif and Anthony DiPaola March 25 (Bloomberg) — Dubai government will support Dubai World’s debt restructuring with as much as $9.5 billion in new funds after the state-owned holding company roiled global markets when it sought to renegotiate $26 billion of debt. “The government of Dubai, acting through the Dubai Financial Support Fund, will support these proposals with significant financial resources, including a commitment to fund up to $9.5 billion in new funding over the business plan period,” the government said in a statement today. “This will be funded by $5.7 billion remaining from the loan previously made available from the government of Abu Dhabi and from internal Dubai government resources.” Dubai World and Nakheel PJSC will discuss these proposals in detail with their creditors, the government said. “The restructuring process is expected to take several months to implement,” it said. “The tribunal process remains available to protect the companies, their creditors and other stakeholders.” Dubai World said in November it would seek to delay repaying all loans until May, sparking a plunge in developing- nation stocks and doubling the cost to protect against a default by Dubai. Dubai World and its property units Nakheel PJSC and Limitless LLC used loans to finance real-estate projects such as palm tree-shaped islands off the emirate’s coast, which it struggled to refinance amid the credit crisis. Debt Estimates Dubai, the second-biggest of seven states that make up the United Arab Emirates, and its state-owned companies ran up debt to transform the sheikhdom into a tourism, trade and financial services hub. The International Monetary Fund estimates Dubai has outstanding loans of $109.3 billion, some of it used to fund a property boom that ended in 2008. The seizure of debt markets after the credit crisis hampered the ability of Dubai-based companies to raise loans and led to a 50 percent decline in property prices in the city. Dubai World will present creditors a “fair” plan to preserve long-term relations with banks and contractors, the emirate’s Supreme Fiscal Committee Chairman Sheikh Ahmed Bin Saeed Al Maktoum said March 16. U.A.E. Central Bank Governor Sultan bin Nasser al-Suwaidi said March 15 Dubai isn’t likely to need more central bank aid. Nakheel, one of the emirate’s three main state-owned business groups, paid $4.1 billion to settle an Islamic bond in December after Dubai received a $5 billion loan from Abu Dhabi, the U.A.E.’s richest emirate that holds about 7 percent of the world’s proven oil reserves. The central bank and two Abu Dhabi- owned banks also lent Dubai’s financial support fund $15 billion in 2009 to help state-related companies. Banks Owed More than 90 banks are owed money by Dubai World. Seven of its biggest creditors, HSBC Holdings Plc , Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc, Standard Chartered Plc , Bank of Tokyo-Mitsubishi UFJ Ltd., Emirates NBD PJSC and Abu Dhabi Commercial Bank PJSC, are negotiating with Dubai World on behalf of the lenders, according to bankers. Moelis & Co., the U.S.-based advisory firm started by former UBS AG investment banking President Kenneth Moelis , and investment bank NM Rothschild & Sons Ltd. are advising the Department of Finance on the Dubai World restructuring. AlixPartners LLP is separately advising the company. In December, Aidan Birkett , a partner at Deloitte LLP, was appointed Dubai World’s chief restructuring officer. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country fail to repay debt. A rise in the contracts signals a deterioration in perceptions of credit quality. For Related News and Information: For Top stories: TOP For Top Gulf: TOP GULF For U.A.E. banking: TNI UAE BNK For U.A.E. real estate: TNI UAE REL For Dubai credit crunch: TNI DUBAI CRUNCH

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Dubai Shares Advance on Debt-Deal Expectations; Emirates NDB, Emaar Climb

March 21, 2010

By Dana El Baltaji March 21 (Bloomberg) — Dubai shares were poised for the highest close since January on speculation Dubai World’s restructuring proposal won’t disappoint investors and after Saudi Arabia’s benchmark index rose to a 17-month high. Dubai Financial Market PJSC surged 6.3 percent as Al Khaleej reported shares listed on Nasdaq Dubai may trade on the exchange in a few weeks. Emaar Properties PJSC , the United Arab Emirates’ biggest developer, rose for a second day. Emirates NBD PJSC, the country’s largest bank by assets, gained the most in more than a month. The Dubai Financial Market General Index increased 2.8 percent to 1,774.43, the highest level since Jan. 11. The ADX General Index advanced 0.9 percent. Dubai’s benchmark index has gained 11 percent this month as investors expect satisfactory repayment terms for state-owned holding company Dubai World’s $26 billion of debt. The company will announce a “fair” proposal “very soon ,” Sheikh Ahmed Bin Saeed Al Maktoum , chairman of the Dubai Supreme Fiscal Committee, said in an interview last week. “It appears markets are anticipating a positive surprise,” said Sameh Hassan , director of research at Rasmala Investment Bank Ltd. The emirate isn’t likely to need more central bank aid, U.A.E. Central Bank Governor Sultan bin Nasser al-Suwaidi has said. Dubai World, one of the emirate’s three main state-owned business groups, said Nov. 25 it would seek to delay repaying debt until at least May 30. Saudi Stocks Saudi stocks, the only market in the Persian Gulf to trade on Saturdays, yesterday soared to the highest level since October 2008 as crude remained above $80 a barrel and investors bet on gains as companies report first-quarter earnings next month. The kingdom is the Arab region’s biggest economy and holder of 21 percent of the world’s proven oil reserves, according to data compiled by Bloomberg. The Tadawul All Share Index gained 0.3 percent today at 1:20 p.m. in Riyadh. “When the Saudi Arabian market goes up, investors see that as a bellwether for our market as well,” said Ian Munro , head of research at MAC Capital Advisors in Dubai. Dubai Financial Market climbed to 1.85 dirhams. Emaar gained 4.9 percent to 3.85 dirhams. Emirates NBD rose 4.6 percent to 2.75 dirhams, the highest close since Jan. 13. Zain Gains Oman’s MSM30 Index climbed 0.7 percent. Bahrain’s gauge gained 0.4 percent, while Qatar’s measure lost less than 0.1 percent. Kuwait Stock Exchange Index retreated 0.2 percent. Zain climbed 1.5 percent to 1,380 fils, the highest intraday level since March 16, on speculation Bharti Airtel Ltd. will make a formal bid for the African assets of Kuwait’s biggest phone company this week. Bharti, the Indian phone company planning a $9 billion purchase of Zain’s African wireless assets, intends to make a formal offer this week after Bharti’s board yesterday approved the bid, according to two people with knowledge of the negotiations. For Related News and Information: Middle East stock market news: NI ARABWRAP Top stock market news: TOP STK On Gulf stock movers: TNI GULF MOV Global market map: MMAP Stories on Gulf stocks: TNI GULF STK World equity index monitor: WEI Today’s top regional news: TOP MIDEAST Most-read stock market stories: MNI STK

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Dubai Shares Advance on Debt-Deal Expectations; Emirates NDB, Emaar Climb

March 21, 2010

By Dana El Baltaji March 21 (Bloomberg) — Dubai shares were poised for the highest close since January on speculation Dubai World’s restructuring proposal won’t disappoint investors and after Saudi Arabia’s benchmark index rose to a 17-month high. Dubai Financial Market PJSC surged 6.3 percent as Al Khaleej reported shares listed on Nasdaq Dubai may trade on the exchange in a few weeks. Emaar Properties PJSC , the United Arab Emirates’ biggest developer, rose for a second day. Emirates NBD PJSC, the country’s largest bank by assets, gained the most in more than a month. The Dubai Financial Market General Index increased 2.8 percent to 1,774.43, the highest level since Jan. 11. The ADX General Index advanced 0.9 percent. Dubai’s benchmark index has gained 11 percent this month as investors expect satisfactory repayment terms for state-owned holding company Dubai World’s $26 billion of debt. The company will announce a “fair” proposal “very soon ,” Sheikh Ahmed Bin Saeed Al Maktoum , chairman of the Dubai Supreme Fiscal Committee, said in an interview last week. “It appears markets are anticipating a positive surprise,” said Sameh Hassan , director of research at Rasmala Investment Bank Ltd. The emirate isn’t likely to need more central bank aid, U.A.E. Central Bank Governor Sultan bin Nasser al-Suwaidi has said. Dubai World, one of the emirate’s three main state-owned business groups, said Nov. 25 it would seek to delay repaying debt until at least May 30. Saudi Stocks Saudi stocks, the only market in the Persian Gulf to trade on Saturdays, yesterday soared to the highest level since October 2008 as crude remained above $80 a barrel and investors bet on gains as companies report first-quarter earnings next month. The kingdom is the Arab region’s biggest economy and holder of 21 percent of the world’s proven oil reserves, according to data compiled by Bloomberg. The Tadawul All Share Index gained 0.3 percent today at 1:20 p.m. in Riyadh. “When the Saudi Arabian market goes up, investors see that as a bellwether for our market as well,” said Ian Munro , head of research at MAC Capital Advisors in Dubai. Dubai Financial Market climbed to 1.85 dirhams. Emaar gained 4.9 percent to 3.85 dirhams. Emirates NBD rose 4.6 percent to 2.75 dirhams, the highest close since Jan. 13. Zain Gains Oman’s MSM30 Index climbed 0.7 percent. Bahrain’s gauge gained 0.4 percent, while Qatar’s measure lost less than 0.1 percent. Kuwait Stock Exchange Index retreated 0.2 percent. Zain climbed 1.5 percent to 1,380 fils, the highest intraday level since March 16, on speculation Bharti Airtel Ltd. will make a formal bid for the African assets of Kuwait’s biggest phone company this week. Bharti, the Indian phone company planning a $9 billion purchase of Zain’s African wireless assets, intends to make a formal offer this week after Bharti’s board yesterday approved the bid, according to two people with knowledge of the negotiations. For Related News and Information: Middle East stock market news: NI ARABWRAP Top stock market news: TOP STK On Gulf stock movers: TNI GULF MOV Global market map: MMAP Stories on Gulf stocks: TNI GULF STK World equity index monitor: WEI Today’s top regional news: TOP MIDEAST Most-read stock market stories: MNI STK

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Al-Suwaidi Says Dubai Isn’t Likely to Need Additional Central Bank Support

March 15, 2010

By Camilla Hall March 15 (Bloomberg) — United Arab Emirates Central Bank Governor Sultan bin Nasser al-Suwaidi said that Dubai isn’t likely to need more central bank aid as one of its companies restructures $26 billion in debt. “They haven’t discussed this issue with us and I don’t think it will be necessary,” al-Suwaidi said today in an interview in Abu Dhabi. His answer came in response to a question on whether Dubai would need further federal support. Dubai, the second-biggest of the U.A.E.’s seven emirates, and its state-owned companies borrowed money to transform the sheikhdom into a tourism, trade and financial services hub. The central bank, the Abu Dhabi government and two Abu-Dhabi-based banks pledged $20 billion to support Dubai’s companies after global credit markets froze. Dubai World, one of the biggest state-owned holding companies, is in talks to delay $26 billion in debt. It will ask banks for permission to delay loan repayments when it presents a plan this month, three bankers familiar with the negotiations said on March 8. The company will present a restructuring proposal to its creditors after its advisers complete valuing the company’s assets, a person close to the Dubai government said on Feb. 17. Treated Equally “They’re mindful that the restructuring package does not impact the reputation of the emirate,” al-Suwaidi said. “All banks will be treated equally and in a fair way. There will be no discrimination between local or international banks.” The central bank is taking an advisory role in the talks, he said. It is not part of the committee charged with the restructuring. Credit default swaps linked to Dubai fell 26 basis points to 440.5 basis points today, according to prices provided by CMA DataVision in London. Nakheel PJSC’s $750 million Islamic bond maturing in January gained 1.375 cents to 63 cents on the dollar at 4:28 p.m. in Dubai, according to Citigroup Inc prices. The bond headed for the highest close since Jan. 15. Nakheel is a property unit of Dubai World that is building palm-shaped islands off the coast of the emirate. U.A.E. banks are well capitalized and won’t “be impacted in a major way,” by the debt restructuring, al-Suwaidi said today. U.A.E. banks have a capital adequacy ratio of 19.2 percent, he said. The International Monetary Fund estimates Dubai borrowed $109.3 billion, about 130 percent of the emirate’s gross domestic product, during a real-estate boom that ended in 2008. “Once the restructuring is put in front of banks I think they will have their own decisions whether to accept or not,” he said. “It’s best to make it attractive and acceptable to banks,” he said. The proposal will be discussed with banks “very soon.” To contact the reporter on this story: Camilla Hall in Abu Dhabi at chall24@bloomberg.net

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Dubai Shares Gain Most in 3 Months on Debt Deal Expectations; Shuaa Jumps

March 14, 2010

By Dana El Baltaji March 14 (Bloomberg) — Dubai’s benchmark stock index rose the most in three months, leading gains in the Persian Gulf, as investor confidence rose on the possibility the government may back state-owned Dubai World. Shuaa Capital PSC, the biggest investment bank in the United Arab Emirates, soared 11.5 percent, the most in three months. Dubai Financial Market PJSC , the only Gulf Arab stock market to sell shares to the public, increased 9.6 percent. Dubai Investment PJSC , the owner of stakes in more than 40 companies, gained 3.1 percent. The Dubai Financial Market General Index advanced 3.7 percent, the most since Dec. 14, to 1,746.6. “One of the messages investors wanted to hear and got last week was that there’s a possibility of a government guarantee,” said Tarek Zohny , a Dubai-based trader at EFG-Hermes Holding SAE. Investors saw it as a sign that Dubai’s troubles may be over, he said. The government is “always behind” Dubai World, Sheikh Ahmed Bin Saeed al-Maktoum, chairman of Dubai Supreme Fiscal Committee and the Chief Executive of Emirates Airline and Group, said in New Delhi on March 12. The government is separating “the bad business from the good business,” he said. Dubai World, which is restructuring $26 billion in debt, will ask banks for permission to delay loan repayments when it presents a plan this month, said three bankers familiar with the negotiations on March 8. The company will present a restructuring proposal to its creditors after its advisers finish valuing company assets, a person close to the Dubai government said Feb. 17. Shuaa Capital Advances Shuaa Capital advanced to 1.36 dirhams. The bank was raised to “neutral” from “underweight” at HSBC Holdings Plc with a price estimate of 1.40 dirhams on March 10. Dubai Financial Market increased the most in three months to 1.82 dirhams. HSBC raised its rating to “neutral” from “underweight” with a price estimate of 1.60 dirhams on March 10. Dubai Investments rose to 1 dirham, the highest since January 11. Abu Dhabi’s ADX General Index gained 1.2 percent, and Qatar’s benchmark stock index rose 0.9 percent. The Kuwait Stock Exchange Index increased 0.4 percent. Bahrain’s gauge dropped 0.3 percent and Oman’s MSM30 Index dropped 0.1 percent. Saudi Arabia’s Tadawul All Share Index advanced 0.2 percent at 1:30 p.m. in Riyadh. To contact the reporter responsible for this story: Dana El Baltaji in Dubai delbaltaji@bloomberg.net .

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Dubai Made Progress in Debt Talks, Davies Says Before Al-Maktoum Meeting

March 10, 2010

By Henry Meyer March 10 (Bloomberg) — Dubai World, the state-owned holding company seeking to renegotiate terms on $26 billion of debt, made “some progress” in talks with creditors, U.K. Trade Minister Mervyn Davies said. “There are signs of some progress being made from what I hear from the banks and therefore I am hopeful that this progress can continue,” Davies said in Dubai today. He was speaking before meeting with the emirate’s officials, including Sheikh Ahmed Bin Saeed al-Maktoum , chairman of Dubai Supreme Fiscal Committee. Dubai World’s debt restructuring hurt confidence and tested U.K. banks’ resolve in the short-term, said Davies, who was chairman of Standard Chartered Plc . Royal Bank of Scotland Group Plc, HSBC Holdings Plc , Lloyds Banking Group Plc and Standard Chartered are among Dubai World’s biggest creditors. Dubai World’s Chief Restructuring Officer Aidan Birkett held talks with HSBC in London earlier this week to outline debt proposals, the Abu Dhabi-based The National reported, without citing anyone. Nakheel PJSC bonds, part of parent Dubai World’s restructuring, advanced the most in three weeks. The developer’s $750 million sukuk, or Islamic bond, added 2.875 cents, headed for the biggest jump since Feb. 18, to 56 cents on the dollar at 3:34 p.m. in Dubai, prices compiled by Bloomberg show. The bond due in January 2011 has climbed from a low of 46.5 cents on Feb. 17 and traded as high as 85.5 cents on Nov. 25, when Dubai World said it may delay debt payments. U.A.E. Ministers Dubai World will ask banks for permission to delay loan repayments when it presents a plan this month, said three bankers familiar with the negotiations March 8. The company will present a restructuring proposal to its creditors after its advisers complete valuing its assets, a person close to the Dubai government said Feb. 17. United Arab Emirates Economy Minister Sultan bin Saeed al- Mansouri said yesterday he’s confident Dubai World will reach an accord with creditors, while Finance Minister Sheikh Hamdan Bin Rashid Al Maktoum said the country stands by Dubai. The Abu Dhabi government, the U.A.E.’s central bank and two Abu Dhabi- owned banks lent $20 billion last year to Dubai’s financial support fund to help repay debts. Dubai World and its Nakheel and Limitless LLC property units used loans to finance real estate projects such as palm tree-shaped islands off the emirate’s coast, which they struggled to refinance amid the credit crisis. Dubai World said in November it would seek to delay repaying all loans until May, sparking the biggest plunge in developing-nation stocks and a doubling of the cost to protect against a default by Dubai. To contact the reporter on this story: Henry Meyer in Dubai at hmeyer4@bloomberg.net

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Nakheel Bonds Advance as JPMorgan Says Creditors May Be Paid at Face Value

March 9, 2010

By Haris Anwar and Dana El Baltaji March 9 (Bloomberg) — Nakheel PJSC bonds, part of parent Dubai World’s planned $26 billion debt restructuring, climbed the most in two months after JPMorgan Chase & Co. said creditors may get paid face value. The developer’s $750 million sukuk, or Islamic bond, added 5 cents, the most since Jan. 6, to 56.25 cents on the dollar at 4:31 p.m. in Dubai, prices compiled by Bloomberg show. The bond due in January 2011 has climbed from a low of 46.5 cents on Feb. 17 and traded as high as 85.5 cents on Nov. 25, when Dubai World said it may delay debt payments. Nakheel’s debt “may not warrant haircuts, and restructuring may only involve long maturity extensions,” JPMorgan said in a report. United Arab Emirates Economy Minister Sultan bin Saeed al-Mansouri said today he’s confident state- owned holding Dubai World will reach an accord with creditors, while Finance Minister Sheikh Hamdan Bin Rashid Al Maktoum said the seven-emirate U.A.E. stands by Dubai. The bank’s “report is very positive and it gives some clarity,” Louis Gargour , the London-based chief investment officer at hedge fund LNG Capital LLP and a holder of Nakheel debt, said in an interview. “You might have a situation where you have sovereign assistance in paying off at maturities.” Dubai World, one of the emirate’s three main state-owned business groups, said Nov. 25 it would seek to delay repaying debt until at least May 30. The announcement sparked the biggest plunge in developing-nation stocks and the largest increase in emerging-market bond yields over U.S. Treasuries in four weeks, while the cost to protect against a default by Dubai doubled. Neutral Rating Dubai World may propose to creditors excluding Nakheel holders a 20 percent cut in face value, a 10-year extension on maturities and a government repayment guarantee, the bank said. A spokesman for Dubai World declined to comment. JPMorgan maintained its neutral rating on Nakheel’s bonds, citing the “unpredictable nature” of the restructuring and “the small probability that sukuks get paid at par upon stated maturity.” The debt “would also have some potential upside if the government guarantees principal repayment under a restructuring plan that involved little or no haircut,” Zafar Nazim , a London-based analyst at the bank, wrote in the report dated yesterday. Dubai avoided a default in December on $4.1 billion of payments due for Nakheel’s 2009 bond after Abu Dhabi and its banks provided $10 billion of loans. ‘Precedent’ “There was a precedent set in 2009 when Nakheel’s debt was settled,” said Jamil Hallak , head of credit trading at Standard Chartered Plc in Dubai. ’’Investors assume that the same will happen in 2010 and 2011, although it’s less likely that they redeem it in full. I think the default is not a scenario that I expect, and that a rollover is more likely.” Dubai, the second-biggest of seven emirates that make up the U.A.E., and its state-owned companies racked up $109.3 billion of debt during a real-estate boom that ended in 2008, according to International Monetary Fund estimates, as the sheikhdom sought to transform into a tourism, trade and financial services hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai- based companies to raise new loans to refinance maturing debt. Swap Option All restructuring options are being considered, including swapping Nakheel’s $1.73 billion bonds with new securities, a person close to the Dubai government said on Feb. 17. Nakheel, a developer of palm-shaped islands, has two outstanding Islamic bonds, a 3.6 billion-dirham ($980 million) floating-rate note due May 13 and a 2.75 percent, $750 million sukuk maturing in January 2011. Moody’s Investors Service estimated last month that U.A.E. banks hold about $15 billion of Dubai World debt. ’’Dubai’s domestic banks’ exposure to Dubai World would be an argument that goes against the government demanding steep haircuts,’’ New York-based JPMorgan said in the report. “Assuming two-thirds or $10 billion of this amount relates to Dubai’s banks, a 40 percent haircut implies provisioning of $4 billion,” the bank said. To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net ;

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Nakheel Bonds Advance as JPMorgan Says Creditors May Be Paid at Face Value

March 9, 2010

By Haris Anwar and Dana El Baltaji March 9 (Bloomberg) — Nakheel PJSC bonds, part of parent Dubai World’s planned $26 billion debt restructuring, climbed the most in two months after JPMorgan Chase & Co. said creditors may get paid face value. The developer’s $750 million sukuk, or Islamic bond, added 5 cents, the most since Jan. 6, to 56.25 cents on the dollar at 4:31 p.m. in Dubai, prices compiled by Bloomberg show. The bond due in January 2011 has climbed from a low of 46.5 cents on Feb. 17 and traded as high as 85.5 cents on Nov. 25, when Dubai World said it may delay debt payments. Nakheel’s debt “may not warrant haircuts, and restructuring may only involve long maturity extensions,” JPMorgan said in a report. United Arab Emirates Economy Minister Sultan bin Saeed al-Mansouri said today he’s confident state- owned holding Dubai World will reach an accord with creditors, while Finance Minister Sheikh Hamdan Bin Rashid Al Maktoum said the seven-emirate U.A.E. stands by Dubai. The bank’s “report is very positive and it gives some clarity,” Louis Gargour , the London-based chief investment officer at hedge fund LNG Capital LLP and a holder of Nakheel debt, said in an interview. “You might have a situation where you have sovereign assistance in paying off at maturities.” Dubai World, one of the emirate’s three main state-owned business groups, said Nov. 25 it would seek to delay repaying debt until at least May 30. The announcement sparked the biggest plunge in developing-nation stocks and the largest increase in emerging-market bond yields over U.S. Treasuries in four weeks, while the cost to protect against a default by Dubai doubled. Neutral Rating Dubai World may propose to creditors excluding Nakheel holders a 20 percent cut in face value, a 10-year extension on maturities and a government repayment guarantee, the bank said. A spokesman for Dubai World declined to comment. JPMorgan maintained its neutral rating on Nakheel’s bonds, citing the “unpredictable nature” of the restructuring and “the small probability that sukuks get paid at par upon stated maturity.” The debt “would also have some potential upside if the government guarantees principal repayment under a restructuring plan that involved little or no haircut,” Zafar Nazim , a London-based analyst at the bank, wrote in the report dated yesterday. Dubai avoided a default in December on $4.1 billion of payments due for Nakheel’s 2009 bond after Abu Dhabi and its banks provided $10 billion of loans. ‘Precedent’ “There was a precedent set in 2009 when Nakheel’s debt was settled,” said Jamil Hallak , head of credit trading at Standard Chartered Plc in Dubai. ’’Investors assume that the same will happen in 2010 and 2011, although it’s less likely that they redeem it in full. I think the default is not a scenario that I expect, and that a rollover is more likely.” Dubai, the second-biggest of seven emirates that make up the U.A.E., and its state-owned companies racked up $109.3 billion of debt during a real-estate boom that ended in 2008, according to International Monetary Fund estimates, as the sheikhdom sought to transform into a tourism, trade and financial services hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai- based companies to raise new loans to refinance maturing debt. Swap Option All restructuring options are being considered, including swapping Nakheel’s $1.73 billion bonds with new securities, a person close to the Dubai government said on Feb. 17. Nakheel, a developer of palm-shaped islands, has two outstanding Islamic bonds, a 3.6 billion-dirham ($980 million) floating-rate note due May 13 and a 2.75 percent, $750 million sukuk maturing in January 2011. Moody’s Investors Service estimated last month that U.A.E. banks hold about $15 billion of Dubai World debt. ’’Dubai’s domestic banks’ exposure to Dubai World would be an argument that goes against the government demanding steep haircuts,’’ New York-based JPMorgan said in the report. “Assuming two-thirds or $10 billion of this amount relates to Dubai’s banks, a 40 percent haircut implies provisioning of $4 billion,” the bank said. To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net ;

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Dubai World Said to Ask Banks to Delay Repayment in $26 Billion Debt Talks

March 8, 2010

By Arif Sharif March 8 (Bloomberg) — Dubai World, the state-owned holding company in talks to renegotiate about $26 billion of debt, will ask banks for permission to delay loan repayments when it presents a plan this month, said three bankers familiar with the negotiations. Banks may be able to avoid a so-called haircut, where they receive less money than they’re owed, if they wait to be repaid, said two of the bankers, who declined to be identified because the talks are private. The banks may also receive a guarantee from Dubai’s government, one of the bankers said. Dubai World and its Nakheel PJSC and Limitless LLC property units used loans to finance real estate projects such as palm tree-shaped islands off the emirate’s coast, which they struggled to refinance amid the credit crisis. Dubai World said in November it would seek to delay repaying all loans until May, sparking the biggest plunge in developing-nation stocks. “The proposal will be a meaningful one,” said Saud Masud , Dubai-based head of Middle Eastern research at UBS AG . “I would highly doubt that what they come out with will be accepted and everyone moves on.” The emirate’s benchmark Dubai Financial Market General Index rose 1.7 percent to 1,649.14 today. Credit default swaps linked to Dubai fell 20 basis points to 487 basis points, prices provided by CMA DataVision in London show. Nakheel PJSC’s 2.75 percent $750 million sukuk bond maturing in January gained 2 percent to 51.25 cents on the dollar. It closed at 50.25 cents on the dollar on March 5. Deloitte, Moelis Deloitte LLP and Moelis & Co., Dubai World’s advisers, are asking the Dubai Financial Support Fund for more money to fund interest payments on the loans in the meantime, the bankers said. Dubai World will primarily rely on asset sales to finance the payments, bankers said. Spokesmen for Dubai World and the Dubai Financial Support Fund declined to comment. Dubai World will approach lenders for the first time this week with a plan to restructure its debt, the Financial Times reported today. The company has asked creditors to meetings in London from today, the FT said. Dubai World will present a restructuring proposal to its creditors after its advisers complete valuing the company’s assets, a person close to the Dubai government said Feb. 17. The final proposal will be made after consultations with the Abu Dhabi government and the United Arab Emirates’ central bank, which along with two Abu Dhabi-owned banks lent $20 billion last year to Dubai’s financial support fund to help state-owned companies during the credit crisis, he said. Bond Swap Nakheel’s $1.73 billion of bonds may be swapped for new securities, the person said. Under another option, banks seeking early repayment would get less than those that wait, he said. More than 90 banks are owed money by Dubai World. Seven of its biggest creditors, HSBC Holdings Plc , Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc, Standard Chartered Plc , Bank of Tokyo-Mitsubishi UFJ Ltd., Emirates NBD PJSC and Abu Dhabi Commercial Bank PJSC, are negotiating with Dubai World on behalf of the lenders, according to bankers. To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Moody’s urgest debt-laden Dubai World to sell assets

February 15, 2010

Dubai World will have to sell more assets in order to restructure about $22 billion (R170 billion) of debt owed by the state-owned conglomerate’s subsidiaries, global ratings agency Moody’s said Monday. ‘We believe that further major asset sales will

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Dubai Shares Drop After Decline in Oil, Global Stocks; Shuaa, Aldar Fall

February 7, 2010

By Zahraa Alkhalisi Feb. 7 (Bloomberg) — Dubai’s index slid the most in almost two weeks, leading declines in the Gulf, as crude prices tumbled to the lowest level in seven weeks and investors awaited details of a new oil field off the emirate’s coast. Shuaa Capital PSC , the biggest investment bank in the United Arab Emirates, slumped the most in two weeks after reporting a fourth-quarter loss of 154.3 million dirhams ($42 million). Aldar Properties PJSC , Abu Dhabi’s biggest real-estate developer dropped the most since Jan. 26 after the company said Khadem Al Qubaisi resigned from its board. The DFM General Index lost 2 percent to 1,630.81 and Abu Dhabi’s ADX General Index lost 0.9 percent. “There is still an atmosphere of risk adversity and so we see a magnified effect on any sell-off, especially in the U.A.E. where liquidity is close to record lows,” said Julian Bruce , director of equity sales at EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank. “There is no news on Dubai World, no disclosure regarding the size of the new oil discovery so there is no reason to buy.” U.S. stocks fell for a fourth week, the longest streak since July, as concern grew that widening budget deficits in Europe will slow the economic recovery. Crude closed at $71.19, the lowest since Dec. 15. The six countries that make up the Gulf Cooperation Council supply 20 percent of the world’s oil. Oil Discovery Dubai’s government said Feb. 5 a newly discovered offshore oil field will enter production within a year and increase crude output by a “noticeable percentage” once commercial operations starts. Dubai World failed to present a restructuring offer to lenders in December and declined to say when a deal could be struck. Dubai, the second biggest member of the U.A.E., last year received a $20 billion lifeline from Abu Dhabi, the U.A.E. capital and home to 90 percent of the country’s oil reserves. Shuaa declined 7.5 percent, the most since Jan. 24, to 1.24 dirhams. Aldar dropped 3.9 percent to 3.94 dirhams. Emaar Properties PJSC fell for the first time in five days, sliding 3.3 percent to 3.2 dirhams. Oman’s measure slid 0.9 percent and Qatar’s gauge declined 1.5 percent. Saudi Arabia’s Tadawul All Share Index was little changed, gaining less than 0.1 percent to 6,216.16. Bahrain’s index gained 1.2 percent and The Kuwait Stock Exchange Index added 0.5 percent. To contact the reporter on this story: Zahraa Alkhalisi in Abu Dhabi at zalkhalisi@bloomberg.net

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Dubai Bailout Rally Evaporates as Silence on Debt Standstill Hurts Stocks

February 1, 2010

By Michael Patterson and Haris Anwar Feb. 1 (Bloomberg) — Dubai’s failure to reassure investors its restructuring plan will succeed is causing the emirate’s benchmark stock index to drop the most in the world and forcing companies to scrap bond sales. The Dubai Financial Market General Index lost 13 percent since Dec. 14, wiping out a rally sparked by Abu Dhabi’s bailout of Dubai World that day. Bonds of the state-owned company’s property developer Nakheel PJSC sank to 56 cents on the dollar from 67.5 cents, while credit default swaps on Dubai government debt trade at 491.5 basis points, near the highest level since Abu Dhabi’s fund injection. Dubai World, in talks to reschedule $22 billion of debt, failed to present an offer in a meeting with lenders in December and declined to say when a deal may be struck. Dubai Electricity & Water Authority said Jan. 17 it delayed a $1.5 billion bond sale as borrowing costs were too high. Lack of clarity on Dubai World’s restructuring plan “is creating uncertainty that is weighing heavily on the market,” said Rami Sidani , the Dubai-based head of Middle East and North Africa investment at Schroder Investment Management Ltd., which oversees about $230 billion worldwide. “We’re not out of the woods yet and we know Dubai will continue to struggle with a debt burden.” Real-Estate Crash Dubai stocks and bonds tumbled in November after the government said Dubai World would seek to delay payments to creditors until at least May 30. Investors speculated that Nakheel, which is building palm tree-shaped islands off the emirate’s coast, would default after Dubai companies lost access to cheap financing because of the global credit crunch and a 50 percent slump in Dubai home prices. Abu Dhabi’s $10 billion bailout on Dec. 14 ensured that Nakheel would have the $4.1 billion it needed to repay an Islamic bond due that day. Dubai is the second-biggest of seven states that make up the United Arab Emirates, whose capital Abu Dhabi holds 8 percent of global oil reserves. Dubai and its state-owned companies borrowed at least $80 billion until 2008 to transform the emirate into a tourism and financial hub. The Dubai stock index jumped 10 percent and bond prices soared on the day Abu Dhabi provided the funds. Dubai credit default swaps, which measure the cost of protecting against the default of government debt, sank to 430 basis points from 540. Biggest Decline The Dubai stock index has since posted the biggest decline among benchmark equity gauges in the world’s 70 largest markets. While global stocks have retreated on concern China will take steps to curb economic growth, the Dubai measure’s 13 percent loss compares with a 4.3 percent decline in the MSCI AC World Index . Nakheel’s $750 million of 2.75 percent bonds due 2011 lost about 17 percent during the period, according to Citigroup Inc. prices on Bloomberg, while credit default swaps jumped 61.5 basis points. A basis point on a credit-default swap contract to protect against the default of $10 million of debt for five years is equivalent to $1,000 a year. The Dubai stock index climbed 2.2 percent to close at 1,624.75 today, while the Nakheel 2011 bonds gained to 56 cents from 55.75 cents on Jan. 29. Dubai credit default swaps fell 1.5 basis points to 491.5, according to CMA DataVision prices. “The Dubai World restructuring is going to be a long and tedious process,” said Shehab Gargash , a managing director at Dubai-based Daman Investments who’s holding half of his $1.5 billion under management in cash. “That’s the main reason we decided to stay out” of Dubai’s “bear market rally,” he said. Worst Is Over Templeton Asset Management Ltd.’s Mark Mobius says the Abu Dhabi bailout ensured the worst of the emirate’s debt crisis is over. The manager of $34 billion in emerging market assets said in an interview there’s “value and opportunity” in Dubai markets and that Templeton bought shares during the selloff in November and early December. “There has to be more revelations about what is being done and how, but the panic is over,” Mobius, the chairman of Templeton Asset Management, said in the Jan. 28 interview in Melbourne. “We are trying to buy at a good price given the fact that transparency isn’t complete.” The Dubai stock index trades for 5.2 times analysts’ 2010 earnings estimates, the cheapest level worldwide after Nigeria’s All Share Index, according to data compiled by Bloomberg. While investors speculate on the recovery values of Dubai debt, the lifeline from Abu Dhabi is helping the state-owned companies meet their interest payments. Nakheel paid a $10.3 million coupon last month on its 2011 bond. Dubai Holding Commercial Operations Group LLC, the investment company owned by Dubai’s ruler, made about $100 million of scheduled payments in January on three bonds. Refinancing Needs Dubai-based firms have to refinance $7.3 billion in syndicated loans and $2.8 billion in maturing bonds this year, according to Deutsche Bank AG estimates. Some of the biggest debt maturities include a $1.25 billion loan due in June by Dubai International Capital LLC, an investment company owned by Dubai’s ruler, and $1.5 billion in two floating-rate dollar notes issued by Emirates NBD PJSC. Emirates Telecommunications Corp. , the U.A.E.’s biggest phone company, has deferred plans to issue the equivalent of $490 million in bonds as it has enough cash for expansion plans, Ahmed bin Ali , a spokesman for the company, said Jan. 28. IPOs Dry Up The Dubai government’s $1.93 billion Islamic bond issued in October was the last sale of bonds from the emirate. Drake & Scull International PJSC , a Dubai-based construction-engineering contractor that raised about 1.2 billion dirhams ($327 million) from its initial public offering in 2008, was the last stock sale from a Dubai-based company, according to Bloomberg data. “It makes very little sense for a Dubai corporate issuer to go out now and just try to force the issue in the market,” said Abdul Kadir Hussain , chief executive officer of fund manager Mashreq Capital DIFC Ltd. “Right now the market is waiting for a strategy. How are we going to reduce the absolute debt level in Dubai and how quickly is this going to happen. Investors are taking a very conservative attitude toward the U.A.E.” To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net Michael Patterson in London at mpatterson10@bloomberg.net . Vivian Salama in Abu Dhabi at vsalama@bloomberg.net

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Dubai’s Silence on Debt Standstill Evaporates Bailout Rally as Stocks Drop

January 31, 2010

By Michael Patterson and Haris Anwar Feb. 1 (Bloomberg) — Dubai’s failure to reassure investors its restructuring plan will succeed is causing the emirate’s benchmark stock index to drop the most in the world and forcing companies to scrap bond sales. The Dubai Financial Market General Index lost 15 percent since Dec. 14, wiping out a rally sparked by Abu Dhabi’s bailout of Dubai World that day. Bonds of the state-owned company’s property developer Nakheel PJSC sank to 55.75 cents on the dollar from 67.5 cents, while credit default swaps on Dubai government debt trade at 493 basis points, the highest level since Abu Dhabi’s fund injection. Dubai World, in talks to reschedule $22 billion of debt, failed to present an offer in a meeting with lenders in December and declined to say when a deal may be struck. Dubai Electricity & Water Authority said Jan. 17 it delayed a $1.5 billion bond sale as borrowing costs were too high. Lack of clarity on Dubai World’s restructuring plan “is creating uncertainty that is weighing heavily on the market,” said Rami Sidani , the Dubai-based head of Middle East and North Africa investment at Schroder Investment Management Ltd., which oversees about $230 billion worldwide. “We’re not out of the woods yet and we know Dubai will continue to struggle with a debt burden.” Real-Estate Crash Dubai stocks and bonds tumbled in November after the government said Dubai World would seek to delay payments to creditors until at least May 30. Investors speculated that Nakheel, which is building palm tree-shaped islands off the emirate’s coast, would default after Dubai companies lost access to cheap financing because of the global credit crunch and a 50 percent slump in Dubai home prices. Abu Dhabi’s $10 billion bailout on Dec. 14 ensured that Nakheel would have the $4.1 billion it needed to repay an Islamic bond due that day. Dubai is the second-biggest of seven states that make up the United Arab Emirates, whose capital Abu Dhabi holds 8 percent of global oil reserves. Dubai and its state-owned companies borrowed at least $80 billion until 2008 to transform the emirate into a tourism and financial hub. The Dubai stock index jumped 10 percent and bond prices soared on the day Abu Dhabi provided the funds. Dubai credit default swaps, which measure the cost of protecting against the default of government debt, sank to 430 basis points from 540. Biggest Decline The Dubai stock index has since posted the biggest decline among benchmark equity gauges in the world’s 70 largest markets. While global stocks have retreated on concern China will take steps to curb economic growth, the Dubai measure’s 15 percent loss compares with a 4 percent decline in the MSCI AC World Index . Nakheel’s $750 million of 2.75 percent bonds due 2011 lost 17 percent during the period, according to Citigroup Inc. prices on Bloomberg, while credit default swaps jumped 63 basis points. A basis point on a credit-default swap contract to protect against the default of $10 million of debt for five years is equivalent to $1,000 a year. “The Dubai World restructuring is going to be a long and tedious process,” said Shehab Gargash , a managing director at Dubai-based Daman Investments who’s holding half of his $1.5 billion under management in cash. “That’s the main reason we decided to stay out” of Dubai’s “bear market rally,” he said. Worst Is Over Templeton Asset Management Ltd.’s Mark Mobius says the Abu Dhabi bailout ensured the worst of the emirate’s debt crisis is over. The manager of $34 billion in emerging market assets said in an interview there’s “value and opportunity” in Dubai markets and that Templeton bought shares during the selloff in November and early December. “There has to be more revelations about what is being done and how, but the panic is over,” Mobius, the chairman of Templeton Asset Management, said in the Jan. 28 interview in Melbourne. “We are trying to buy at a good price given the fact that transparency isn’t complete.” The Dubai stock index trades for 5.1 times analysts’ 2010 earnings estimates, the cheapest level worldwide after Nigeria’s All Share Index, according to data compiled by Bloomberg. While investors speculate on the recovery values of Dubai debt, the lifeline from Abu Dhabi is helping the state-owned companies meet their interest payments. Nakheel paid a $10.3 million coupon last month on its 2011 bond. Dubai Holding Commercial Operations Group LLC, the investment company owned by Dubai’s ruler, made about $100 million of scheduled payments last month on three bonds. Refinancing Needs Dubai-based firms have to refinance $7.3 billion in syndicated loans and $2.8 billion in maturing bonds this year, according to Deutsche Bank AG estimates. Some of the biggest debt maturities include a $1.25 billion loan due in June by Dubai International Capital LLC, an investment company owned by Dubai’s ruler, and $1.5 billion in two floating-rate dollar notes issued by Emirates NBD PJSC. Emirates Telecommunications Corp., the U.A.E.’s biggest phone company, has deferred plans to issue the equivalent of $490 million bonds as it has enough cash for expansion plans, Ahmed bin Ali , a spokesman for the company, said Jan. 28. The Dubai government’s $1.93 billion Islamic bond issued in October was the last sale of bonds from the emirate. Drake & Scull International PJSC , a Dubai-based construction-engineering contractor that raised about 1.2 billion dirhams ($327 million) from its initial public offering in 2008, was the last stock sale from a Dubai- based company, according to Bloomberg data. “It makes very little sense for a Dubai corporate issuer to go out now and just try to force the issue in the market,” said Abdul Kadir Hussain , chief executive officer of fund manager Mashreq Capital DIFC Ltd. “Right now the market is waiting for a strategy. How are we going to reduce the absolute debt level in Dubai and how quickly is this going to happen. Investors are taking a very conservative attitude toward the U.A.E.” To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net Michael Patterson in London at mpatterson10@bloomberg.net . Vivian Salama in Abu Dhabi at vsalama@bloomberg.net

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Dubai’s Silence on Debt Standstill Evaporates Bailout Rally as Stocks Drop

January 31, 2010

By Michael Patterson and Haris Anwar Feb. 1 (Bloomberg) — Dubai’s failure to reassure investors its restructuring plan will succeed is causing the emirate’s benchmark stock index to drop the most in the world and forcing companies to scrap bond sales. The Dubai Financial Market General Index lost 15 percent since Dec. 14, wiping out a rally sparked by Abu Dhabi’s bailout of Dubai World that day. Bonds of the state-owned company’s property developer Nakheel PJSC sank to 55.75 cents on the dollar from 67.5 cents, while credit default swaps on Dubai government debt trade at 493 basis points, the highest level since Abu Dhabi’s fund injection. Dubai World, in talks to reschedule $22 billion of debt, failed to present an offer in a meeting with lenders in December and declined to say when a deal may be struck. Dubai Electricity & Water Authority said Jan. 17 it delayed a $1.5 billion bond sale as borrowing costs were too high. Lack of clarity on Dubai World’s restructuring plan “is creating uncertainty that is weighing heavily on the market,” said Rami Sidani , the Dubai-based head of Middle East and North Africa investment at Schroder Investment Management Ltd., which oversees about $230 billion worldwide. “We’re not out of the woods yet and we know Dubai will continue to struggle with a debt burden.” Real-Estate Crash Dubai stocks and bonds tumbled in November after the government said Dubai World would seek to delay payments to creditors until at least May 30. Investors speculated that Nakheel, which is building palm tree-shaped islands off the emirate’s coast, would default after Dubai companies lost access to cheap financing because of the global credit crunch and a 50 percent slump in Dubai home prices. Abu Dhabi’s $10 billion bailout on Dec. 14 ensured that Nakheel would have the $4.1 billion it needed to repay an Islamic bond due that day. Dubai is the second-biggest of seven states that make up the United Arab Emirates, whose capital Abu Dhabi holds 8 percent of global oil reserves. Dubai and its state-owned companies borrowed at least $80 billion until 2008 to transform the emirate into a tourism and financial hub. The Dubai stock index jumped 10 percent and bond prices soared on the day Abu Dhabi provided the funds. Dubai credit default swaps, which measure the cost of protecting against the default of government debt, sank to 430 basis points from 540. Biggest Decline The Dubai stock index has since posted the biggest decline among benchmark equity gauges in the world’s 70 largest markets. While global stocks have retreated on concern China will take steps to curb economic growth, the Dubai measure’s 15 percent loss compares with a 4 percent decline in the MSCI AC World Index . Nakheel’s $750 million of 2.75 percent bonds due 2011 lost 17 percent during the period, according to Citigroup Inc. prices on Bloomberg, while credit default swaps jumped 63 basis points. A basis point on a credit-default swap contract to protect against the default of $10 million of debt for five years is equivalent to $1,000 a year. “The Dubai World restructuring is going to be a long and tedious process,” said Shehab Gargash , a managing director at Dubai-based Daman Investments who’s holding half of his $1.5 billion under management in cash. “That’s the main reason we decided to stay out” of Dubai’s “bear market rally,” he said. Worst Is Over Templeton Asset Management Ltd.’s Mark Mobius says the Abu Dhabi bailout ensured the worst of the emirate’s debt crisis is over. The manager of $34 billion in emerging market assets said in an interview there’s “value and opportunity” in Dubai markets and that Templeton bought shares during the selloff in November and early December. “There has to be more revelations about what is being done and how, but the panic is over,” Mobius, the chairman of Templeton Asset Management, said in the Jan. 28 interview in Melbourne. “We are trying to buy at a good price given the fact that transparency isn’t complete.” The Dubai stock index trades for 5.1 times analysts’ 2010 earnings estimates, the cheapest level worldwide after Nigeria’s All Share Index, according to data compiled by Bloomberg. While investors speculate on the recovery values of Dubai debt, the lifeline from Abu Dhabi is helping the state-owned companies meet their interest payments. Nakheel paid a $10.3 million coupon last month on its 2011 bond. Dubai Holding Commercial Operations Group LLC, the investment company owned by Dubai’s ruler, made about $100 million of scheduled payments last month on three bonds. Refinancing Needs Dubai-based firms have to refinance $7.3 billion in syndicated loans and $2.8 billion in maturing bonds this year, according to Deutsche Bank AG estimates. Some of the biggest debt maturities include a $1.25 billion loan due in June by Dubai International Capital LLC, an investment company owned by Dubai’s ruler, and $1.5 billion in two floating-rate dollar notes issued by Emirates NBD PJSC. Emirates Telecommunications Corp., the U.A.E.’s biggest phone company, has deferred plans to issue the equivalent of $490 million bonds as it has enough cash for expansion plans, Ahmed bin Ali , a spokesman for the company, said Jan. 28. The Dubai government’s $1.93 billion Islamic bond issued in October was the last sale of bonds from the emirate. Drake & Scull International PJSC , a Dubai-based construction-engineering contractor that raised about 1.2 billion dirhams ($327 million) from its initial public offering in 2008, was the last stock sale from a Dubai- based company, according to Bloomberg data. “It makes very little sense for a Dubai corporate issuer to go out now and just try to force the issue in the market,” said Abdul Kadir Hussain , chief executive officer of fund manager Mashreq Capital DIFC Ltd. “Right now the market is waiting for a strategy. How are we going to reduce the absolute debt level in Dubai and how quickly is this going to happen. Investors are taking a very conservative attitude toward the U.A.E.” To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net Michael Patterson in London at mpatterson10@bloomberg.net . Vivian Salama in Abu Dhabi at vsalama@bloomberg.net

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Dubai Shares Fall on Decline in U.S., Dubai World Uncertainty; Emaar Drops

January 31, 2010

By Anthony DiPaola Jan. 31 (Bloomberg) — Dubai stocks retreated for the first time in three days after U.S. shares fell, oil closed at the lowest in five weeks and investors sought clarity on the restructuring of government-owned holding company Dubai World. Emirates NBD PJSC , the United Arab Emirates’ largest bank by assets, declined to its lowest level since October 2007. Emaar Properties PJSC , the country’s biggest construction company, dropped for the first time in three days. The DFM General Index lost 1.1 percent to 1,582.23 at 1:13 p.m. in Dubai, bringing the slump this month to 12 percent. Crude closed at $72.89 a barrel in New York on Jan. 29. “Stocks in the U.S. saw a sell down over uncertainty about the implications of a possible change in the monetary policy stance from quantitative easing to liquidity tightening,” said Ali Khan , head of cash-equity trading at Dubai-based Arqaam Capital Ltd. “We are also continuing to wait for clarity on the Dubai World restructuring. Until there is some clarity it will continue to be an overhang on the market.” The Standard & Poor’s 500 Index dropped on Jan. 29 as technology companies missed earnings estimates and surging Greek bond yields triggered a flight from riskier assets. The S&P Index and European stocks fell the most in January for any month since February as concern grew countries worldwide may step up plans to withdraw stimulus measures and some earnings disappointed investors. Emirates NBD Dubai’s benchmark index has retreated 24 percent since Dubai World on Nov. 25 said it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt. Dubai World repaid $4.1 billion on an Islamic bond from Nakheel PJSC last month after Dubai raised a $10 billion loan from Abu Dhabi. Emirates NBD tumbled 4.5 percent to 2.34 dirhams, the lowest level since the bank was formed late 2007 from the merger of Emirates Bank International PJSC and National Bank of Dubai PJSC. Emaar dropped 1.9 percent to 3.03 dirhams. Union Properties PJSC, another developer, lost 3.9 percent to 50 fils. Abu Dhabi’s benchmark index fell less than 0.1 percent, Qatar’s DSM 20 Index declined 0.6 percent and the Kuwait Stock Exchange index retreated 0.5 percent. Oman’s MSM30 Index added 0.3 percent, Bahrain’s measure gained 1 percent and Saudi Arabia’s Tadawul All Share Index rose 0.2 percent. To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net .

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Dubai World Removes Private Equity CEO Jackson as Company Refinances Debt

January 20, 2010

By Haris Anwar Jan. 20 (Bloomberg) — Dubai World replaced the chief executive officer of its private equity unit Istithmar World, the owner of luxury retailer Barneys New York, as the state- owned company seeks to renegotiate about $22 billion of debt. David Jackson was replaced by Istithmar’s chief investment officer Andy Watson , who was appointed acting chief executive with immediate effect, Dubai World said today in an e-mailed statement. Watson is a former director at Barclays Capital. “Dubai World is cleaning house and signaling to investors that it’s making difficult decisions and responding to their criticisms,” said Louis Gargour , the chief investment officer at hedge fund LNG Capital LLP in London. “Dubai World may sell some of its non-core assets. We believe that they will resist selling them or any assets for that matter at 50 cents on a dollar.” Istithmar and Dubai World struggled last year on investments including Barneys and CityCenter, an $11 billion project in Las Vegas. Istithmar bought Barneys in 2007 for $942.3 million. Abu Dhabi, the wealthiest member of the United Arab Emirates, provided a $20 billion bailout in 2009 for Dubai as the emirate ran into difficulties meeting payments on debt used to finance real-estate projects. ‘Maximize Value’ Debt from subsidiaries including Istithmar World, Infinity World Holding and Ports & Free Zone World will be excluded from the negotiations as these companies are on “a stable financial footing,” Dubai World said on Dec. 1. “Today, Istithmar World is focused on the steady-state management of existing assets to maximize value rather than on private equity investment,” Dubai World’s Chief Restructuring Officer Aidan Birkett said in today’s statement. As recently as October, Jackson told CNBC that Istithmar was making “small bolt-on acquisitions.” “We still see positive prospects,” Jackson said in the Oct. 23 interview. “I’m not going anywhere.” Dubai, the second-biggest of seven states that make up the U.A.E., and its state-owned companies borrowed at least $80 billion until 2008 to transform the emirate into a tourism and financial hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai-based companies to raise new loans to refinance maturing debt. New York Jackson became Istithmar’s CEO in 2006 and spearheaded the company’s drive to expand its portfolio. Istithmar spent at least $16.4 billion on publicly reported investments this decade, according to the Monitor-FEEM SWF transaction database. Among its investments are Yacht Haven Grande, a marina complex in the Caribbean, the W Hotel Union Square in New York and GLG Partners Inc., a hedge fund. Istithmar may halt investments as part of a restructuring effort that may result in a sale of the fund or its assets, people familiar with the plan said in September. The company’s co-chief investment officers John Amato and Felix Herlihy left the firm the same month. “Avoiding sales and restructuring maturities still seems to be the best way out for them,” Gargour said. ”A further large cash injection is likely and the best outcome for the regions reputation and solvency looking forward.” To contact the reporters on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net Arif Sharif in Dubai at asharif2@bloomberg.net

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UAE- Investor confidence improves

December 29, 2009

Capital, the UAE’s biggest investment bank, said investor confidence was dented due to the November 25 surprise debt restructuring announcement by Dubai World. But optimism has returned, although only partially, after the repayment of a $4.1 billion

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Investor Confidence Improves after Dubai World Episode

December 28, 2009

Capital, the UAE’s biggest investment bank, said investor confidence was dented due to the November 25 surprise debt restructuring announcement by Dubai World. But optimism has returned, although only partially, after the repayment of a $4.1 billion

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Dubai World Said to Present Standstill Deal on $22 Billion Debt in January

December 22, 2009

By Arif Sharif and Haris Anwar Dec. 22 (Bloomberg) — Dubai World will present a standstill offer to banks in early January as the state-owned holding company attempts to restructure about $22 billion of debt, three bankers who attended a presentation on the matter yesterday said. Dubai World, which owns property unit Nakheel PJSC, port operator DP World Ltd. and private equity company Istithmar World PJSC, told lenders it needs time to allow its assets to recover from the drop in value following the credit crunch, said the bankers, who declined to be identified because the meeting was private. Some assets may be sold over time to repay debt, they said. “They need to sit down and talk it over in more than one meeting,” said Hesham Bakry , Dubai-based institutional sales manager at Al-Futtaim HC Securities Co. “The positive thing is that they are meeting and both parties want to find a better way to handle this issue. It should have happened a lot earlier.” Dubai World, one of the emirate’s three main state-owned business groups, announced Nov. 25 it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt, including of property unit Nakheel PJSC, which is building palm tree-shaped islands off the emirate’s coast. It repaid $4.1 billion on an Islamic bond from Nakheel last week after Dubai received a $10 billion loan from Abu Dhabi. ‘Orderly’ Restructuring Dubai World will work with creditors to reach a standstill agreement on its borrowing “in an orderly way,” it said in a statement following yesterday’s meeting. Dubai’s government promised “financial support to cover working capital and interest expenses to ensure the continuity of key projects” if a standstill is achieved, according to the statement. The cost of protecting Dubai government debt from default fell 2 basis points to 444, according to CMA DataVision prices for credit-default swaps, contracts that fall as perceptions of credit quality improve. A basis point is equivalent to $1,000 a year on a contract protecting $10 million of debt. The terms of government support for Dubai World have yet to be agreed upon, two bankers involved in the talks said ahead yesterday’s gathering. The lack of an accord would lead to a delay in making the standstill request, they said. The complexity of Dubai World Group and its funding structure are to blame for the delay, one banker said ahead of the meeting, citing a Dec. 18 letter from the company’s Chief Restructuring Officer Aidan Birkett about the agenda for the gathering. About 100 bankers attended the presentation at the Dubai International Convention and Exhibition Centre. Borrowing to Diversify Dubai, the second-biggest of seven states that make up the United Arab Emirates, and its state-owned companies borrowed at least $80 billion until last year to transform the emirate into a tourism and financial hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai-based companies to raise new loans. Debt restructuring by Dubai state-run companies may almost double to $46.7 billion as more of the emirate’s businesses may need help making payments, Morgan Stanley said earlier this month. Dubai Holding LLC, Dubai Holding Commercial Operations Group LLC, Borse Dubai Ltd. and Dubai Sukuk Center Ltd. may join Dubai World in restructuring debt, Morgan Stanley analysts Mohamed W. Jaber and Paolo Batori wrote in the report. Dubai set up a financial support fund earlier this year to help state-related companies facing problems raising cash amid the credit crisis. It raised $10 billion for the fund in February by selling bonds to the U.A.E. central bank and another $5 billion in November through a bond sale to Abu Dhabi government-controlled banks. U.A.E. Minister of Economy Sultan bin Saeed al-Mansouri said further federal government support for Dubai should be “studied” properly. “Each issue has to be studied in a proper manner, evaluated and based on that an answer will be provided at the federal level or the local level,” al-Mansouri told reporters in Abu Dhabi today when asked whether the federal government will extend more financial support to Dubai. To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net ; Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai World Said to Intend to Present `Standstill’ Deal in Early January

December 22, 2009

By Arif Sharif and Haris Anwar Dec. 22 (Bloomberg) — Dubai World will present a standstill offer to banks in early January as the state-owned holding company attempts to restructure about $22 billion of debt, three bankers who attended a presentation on the matter yesterday said. Dubai World, which owns property unit Nakheel PJSC, port operator DP World Ltd. and private equity company Istithmar World PJSC, told lenders it needs time to allow its assets to recover from the drop in value following the credit crunch, said the bankers, who declined to be identified because the meeting was private. Some assets may be sold over time to repay debt, they said. “They need to sit down and talk it over in more than one meeting,” said Hesham Bakry , Dubai-based institutional sales manager at Al-Futtaim HC Securities Co. “The positive thing is that they are meeting and both parties want to find a better way to handle this issue. It should have happened a lot earlier.” Dubai World, one of the emirate’s three main state-owned business groups, announced Nov. 25 it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt, including of property unit Nakheel PJSC, which is building palm tree-shaped islands off the emirate’s coast. It repaid $4.1 billion on an Islamic bond from Nakheel last week after Dubai received a $10 billion loan from Abu Dhabi. ‘Orderly’ Restructuring Dubai World will work with creditors to reach a standstill agreement on its borrowing “in an orderly way,” it said in a statement following yesterday’s meeting. Dubai’s government promised “financial support to cover working capital and interest expenses to ensure the continuity of key projects” if a standstill is achieved, according to the statement. The cost of protecting Dubai government debt from default fell 2 basis points to 444, according to CMA DataVision prices for credit-default swaps, contracts that fall as perceptions of credit quality improve. A basis point is equivalent to $1,000 a year on a contract protecting $10 million of debt. The terms of government support for Dubai World have yet to be agreed upon, two bankers involved in the talks said ahead yesterday’s gathering. The lack of an accord would lead to a delay in making the standstill request, they said. The complexity of Dubai World Group and its funding structure are to blame for the delay, one banker said ahead of the meeting, citing a Dec. 18 letter from the company’s Chief Restructuring Officer Aidan Birkett about the agenda for the gathering. About 100 bankers attended the presentation at the Dubai International Convention and Exhibition Centre. Borrowing to Diversify Dubai, the second-biggest of seven states that make up the United Arab Emirates, and its state-owned companies borrowed at least $80 billion until last year to transform the emirate into a tourism and financial hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai-based companies to raise new loans. Debt restructuring by Dubai state-run companies may almost double to $46.7 billion as more of the emirate’s businesses may need help making payments, Morgan Stanley said earlier this month. Dubai Holding LLC, Dubai Holding Commercial Operations Group LLC, Borse Dubai Ltd. and Dubai Sukuk Center Ltd. may join Dubai World in restructuring debt, Morgan Stanley analysts Mohamed W. Jaber and Paolo Batori wrote in the report. Dubai set up a financial support fund earlier this year to help state-related companies facing problems raising cash amid the credit crisis. It raised $10 billion for the fund in February by selling bonds to the U.A.E. central bank and another $5 billion in November through a bond sale to Abu Dhabi government-controlled banks. U.A.E. Minister of Economy Sultan bin Saeed al-Mansouri said further federal government support for Dubai should be “studied” properly. “Each issue has to be studied in a proper manner, evaluated and based on that an answer will be provided at the federal level or the local level,” al-Mansouri told reporters in Abu Dhabi today when asked whether the federal government will extend more financial support to Dubai. To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net ; Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai World Didn’t Present Standstill Offer at Meeting Today, Bankers Say

December 21, 2009

By Arif Sharif and Vivian Salama Dec. 21 (Bloomberg) — Dubai World, which is seeking to restructure about $22 billion of debt, may be unable to present a “standstill” offer to lenders today as the terms of government support for the state-owned holding company have yet to be agreed, two bankers involved in the talks said. The complexity of Dubai World Group and its funding structure are to blame for the delay, one banker said, citing a Dec. 18 letter from the company’s Chief Restructuring Officer Aidan Birkett about the agenda for the meeting with creditors. The meeting is unlikely to be substantive and will focus on information sharing, another banker said. Both declined to be identified because the discussions are private. A spokesman for Dubai World would not comment. The meeting has started at the Dubai International Convention and Exhibition Centre, a person familiar with the meeting said. About 100 bankers are attending and Dubai World will make a presentation about the group. Dubai World, one of the emirate’s three main state-owned business groups, announced Nov. 25 it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt, including of property unit Nakheel PJSC, which is building palm tree-shaped islands off the emirate’s coast. It repaid $4.1 billion on an Islamic bond from Nakheel last week after Dubai received a $10 billion loan from Abu Dhabi. Markets “This will certainly have a negative effect on markets,” said Fadi Al Said , head of equities at ING Investment Management (Dubai) Ltd. by telephone from Jordan. “With the amount of debt involved these discussions are going to take some time, like they did in the case of Global Investment in Kuwait.” Global Investment House KSCC , the investment bank that defaulted on loan repayments at the end of last year, said Dec. 10 it signed an agreement with its creditors to restructure $1.73 billion of debt. Global entered into new three-year amortizing facilities with each of its 53 lending banks, thus ending the “events of default,” it said. The Dubai Financial Market General Index lost as much as 2.1 percent in intraday trading today, and closed 0.3 percent lower at 1827.52. The index has dropped 13 percent since Dubai World’s debt restructuring announcement. Information Sharing Dubai, the second-biggest of seven states that make up the United Arab Emirates, and its state-owned companies borrowed at least $80 billion until last year to transform the emirate into a tourism and financial hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai-based companies to raise new loans. Some Dubai World Group companies including DP World Ltd. , the world’s fourth-biggest port operator, private equity company Istithmar World PJSC and ship repair company Drydocks World LLC, are excluded from the loan restructuring as they are on a “stable financial footing,” Dubai World has said. Today’s meeting is meant to provide banks with information on debt of Dubai World and its subsidiaries and the terms of support of the Government of Dubai, the bankers said. Dubai set up a special court Dec. 14 to oversee the financial reorganization of Dubai World. The court will enable the restructuring of Dubai World “in accordance with international best practices,” it said. Government Support Debt restructuring by Dubai state-run companies may almost double to $46.7 billion as more of the emirate’s businesses could need help making payments, Morgan Stanley said earlier this month. Dubai Holding LLC, Dubai Holding Commercial Operations Group LLC, Borse Dubai Ltd. and Dubai Sukuk Center Ltd. may join Dubai World in restructuring debt, Morgan Stanley analysts Mohamed W. Jaber and Paolo Batori wrote in the report. Dubai set up a financial support fund earlier this year to help state-related companies facing problems raising cash amid the credit crisis. It raised $10 billion for the fund in February by selling bonds to the U.A.E. central bank and another $5 billion in November through a bond sale to Abu Dhabi government-controlled banks. U.A.E. Minister of Economy Sultan bin Saeed al-Mansouri said further federal government support for Dubai should be “studied” properly. “Each issue has to be studied in a proper manner, evaluated and based on that an answer will be provided at the federal level or the local level,” al-Mansouri told reporters in Abu Dhabi today when asked whether the federal government will extend more financial support to Dubai. Dubai World said Nov. 30 that its restructuring would be carried out over several phases and include an assessment of deleveraging options, “including asset sales.” To contact the reporter on this story: Vivian Salama in Dubai vsalama@bloomberg.net Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai World May Not Offer Standstill Terms at Meeting Today, Bankers Say

December 20, 2009

By Arif Sharif and Vivian Salama Dec. 21 (Bloomberg) — Dubai World, which is seeking to restructure about $22 billion of debt, may be unable to present a “standstill” offer to lenders today as the terms of government support for the state-owned holding company have yet to be agreed, two bankers involved in the talks said. The complexity of Dubai World Group and its funding structure are to blame for the delay, one banker said, citing a Dec. 18 letter from the company’s Chief Restructuring Officer Aidan Birkett about the agenda for the meeting with creditors. The meeting is unlikely to be substantive and will focus on information sharing, another banker said. Both declined to be identified because the discussions are private. A spokesman for Dubai World would not to comment. Dubai World, one of the emirate’s three main state-owned business groups, announced Nov. 25 it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt, including of property unit Nakheel PJSC, which is building palm tree-shaped islands off the emirate’s coast. It repaid $4.1 billion on an Islamic bond from Nakheel last week after Dubai received a $10 billion loan from Abu Dhabi. “This will certainly have a negative effect on markets,” said Fadi Al Said , head of equities at ING Investment Management (Dubai) Ltd. by telephone from Jordan. “With the amount of debt involved these discussions are going to take some time, like they did in the case of Global Investment in Kuwait,” he said. Global Investment Global Investment House KSCC , the investment bank that defaulted on loan repayments at the end of last year, said Dec. 10 it signed an agreement with its creditors to restructure $1.73 billion of debt. Global entered into new three-year amortizing facilities with each of its 53 lending banks, thus ending the “events of default,” it said in a statement. Dubai, the second-biggest of seven states that make up the United Arab Emirates, and its state-owned companies borrowed at least $80 billion until last year to transform the emirate into a tourism and financial hub. The seizure of debt markets after the onset of the global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai-based companies to raise new loans. Information Sharing Some Dubai World group companies including DP World Ltd. , the world’s fourth-biggest port operator, private equity company Istithmar World PJSC and ship repair company Drydocks World LLC, are excluded from the loan restructuring as they are on a “stable financial footing,” Dubai World has said. Today’s meeting is meant to provide banks with information on debt of Dubai World and its subsidiaries and the terms of support of the Government of Dubai, bankers said. Dubai set up a special court Dec. 14 to oversee the financial reorganization of Dubai World. The court will enable the restructuring of Dubai World “in accordance with international best practices,” it said. Debt restructuring by Dubai state-run companies may almost double to $46.7 billion as more of the emirate’s businesses could need help making payments, Morgan Stanley said earlier this month. Dubai Holding LLC, Dubai Holding Commercial Operations Group LLC, Borse Dubai Ltd. and Dubai Sukuk Center Ltd. may join Dubai World in restructuring debt, Morgan Stanley analysts Mohamed W. Jaber and Paolo Batori wrote in the report. Dubai set up a financial support fund earlier this year to help state-related companies facing problems raising cash amid the credit crisis. It raised $10 billion for the fund in February by selling bonds to the U.A.E. central bank and another $5 billion in November through a bond sale to Abu Dhabi government-controlled banks. Dubai World said Nov. 30 that its restructuring would be carried out over several phases and include an assessment of deleveraging options, “including assets sales.” To contact the reporter on this story: Vivian Salama in Dubai vsalama@bloomberg.net Arif Sharif in Dubai at asharif2@bloomberg.net

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Dubai Bonds Show More Aid Needed From Abu Dhabi to Repay 2010, 2011 Debt

December 15, 2009

By Arif Sharif and Laura Cochrane Dec. 15 (Bloomberg) — Dubai, the recipient yesterday of a $10 billion bailout from Abu Dhabi, has yet to convince investors it will meet all of its obligations. Debt from Dubai state-controlled entities DP World Ltd., Dubai Commercial Operations Group LLC and Nakheel PJSC remains as much as 28 percent lower than before the emirate said on Nov. 25 it was seeking a “standstill” from creditors. Standard & Poor’s said it won’t automatically reverse downgrades made to ratings on state entities since the announcement. Dubai’s cash needs are “not going to stop and go away,” said John Sfakianakis , chief economist at Banque Saudi Fransi in Riyadh. “There is still debt that needs to be settled in 2010 and 2011.” Abu Dhabi, the capital of the United Arab Emirates and holder of 8 percent of the world’s oil reserves, provided $10 billion for Dubai’s support fund, of which $4.1 billion was used to repay a Dec. 14 Islamic bond of Dubai World’s property unit of Nakheel. The rest of the money will help keep state-owned holding company Dubai World operational until it reaches an agreement with lenders, the government said yesterday in a statement. At least $55 billion of Dubai and its state-owned companies’ bonds and loans are due in the next three years, Goldman Sachs Group Inc. economist Ahmet Akarli said in an e- mailed note to investors. Bonds, Loans Dubai, the second biggest of seven states that make up the U.A.E., and its state-owned companies borrowed at least $80 billion until last year to help turn the emirate into a tourist and financial service hub. The collapse of global credit markets led to a 50 percent crash in property prices in Dubai and drove concern some of its companies will be unable to repay loans. Nakheel has $1.73 billion of debt coming due in the next two years, data compiled by Bloomberg show. The company’s $750 million 2011 Islamic bond rose to 67 cents on the dollar yesterday from 36 cents on Dec. 11 and was unchanged at 9 a.m. in London, according to Citigroup Inc. prices. The securities, known as sukuk, are down 24 percent from 88.25 cents on Nov. 24, the day before Dubai World asked creditors to agree to a delay in debt repayment. The Nov. 25 announcement spurred Dubai’s steepest stock- market selloff in 13 months and Europe’s worst rout since April. Nakheel’s $3.52 billion sukuk tumbled as much as 62 percent in three days, according to Citigroup. Dubai World said Dec. 1 the restructuring would affect $26 billion of debt. Dubai’s DFM General Index of shares fell for the first time in four days, closing 1.5 percent lower. ‘Only the Beginning’ Yesterday’s bailout was “only the beginning of a comprehensive financial realignment process which may involve asset sales, debt restructuring and liquidation of insolvent entities,” Goldman Sachs’s Akarli said. “It is clear additional aid from the U.A.E. will be needed.” The emirate set up a financial support fund earlier this year to help state-related companies. The latest $10 billion bailout followed the sale of $10 billion in Dubai bonds to the national central bank based in Abu Dhabi in February and a $5 billion loan by two Abu Dhabi-owned commercial banks on Nov. 25. “More damage would have been done if Abu Dhabi had not come out with these resources,” Arnab Das , the head of market research and strategy at Roubini Global Economics in London, said in an interview with Bloomberg Radio. “There is probably going to be continued implications for other issuers that are heavily leveraged who don’t have short-fire access either to refinancing or bailout resources.” Dubai Holding Debt restructuring by Dubai state-run companies may almost double to $46.7 billion as more of the emirate’s businesses may need help making payments, Morgan Stanley said in a report Dec. 8. Another state-owned company, Dubai Holding LLC, may join Dubai World in restructuring debt, the report said. Abu Dhabi’s rulers “will not necessarily just bail out everyone across the board,” Sfakianakis said. “They will be selective.” DP World’s $1.5 billion sukuk due 2017 is 8 cents lower than on Nov. 24, after rising today to 86.8 cents on the dollar, according to BNP Paribas SA prices. The $500 million of Dubai Commercial Operation Group’s dollar-denominated debt due in 2012 is 28 percent lower than on Nov. 24. The size of Dubai World’s debt means that the restructuring would have to continue, which “could be painful,” said Mohieddine Kronfol , a managing director at fund manager Algebra Capital Ltd. That may “involve a haircut and a significant extension of loan maturity for banks,” he said. Dubai World has about $40 billion of bonds and loans outstanding, Goldman Sachs estimated. Of that, $8 billion will be maturing in 2010, $12 billion in 2011 and $5 billion in 2012. Dubai World may sell assets in the U.A.E. and abroad to repay its borrowings, Abdulrahman Al Saleh , director general of Dubai’s Department of Finance told Al Jazeera television Dec. 6. These are “assets belonging to the company and not the government,” he said. To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net To contact the reporter on this story: Laura Cochrane in London at lcochrane3@bloomberg.net

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Video: Buik Calls Abu Dhabi Bailout of Dubai `Breath of Air’: Video

December 14, 2009

Dec. 14 (Bloomberg) — David Buik, a market analyst at BGC Partners, talks with Bloomberg’s Jon Erlichman about Abu Dhabi’s agreement to provide $10 billion to help Dubai World, the state-owned holding company, avoid defaulting on a $4.1 billion bond payment that roiled global financial markets during the past month. Buik, speaking from London, also discusses the Japanese economy and bids for Cadbury Plc. (Source: Bloomberg)

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Video: FT’s Stovin-Bradford on Abu Dhabi’s Dubai World Bailout: Video

December 14, 2009

Dec. 14 (Bloomberg) — Richard Stovin-Bradford of the Financial Times’ Lex commentary team talks with Bloomberg’s Deirdre Bolton about Abu Dhabi’s $10 billion bailout to Dubai World, the state-owned holding company. (Source: Bloomberg)

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Dubai Bond Risk Plunges by Most Since February After Abu Dhabi Pledges Aid

December 14, 2009

By Sarah McDonald and Abigail Moses Dec. 14 (Bloomberg) — The cost of protecting investors against Dubai defaulting on its debt tumbled the most since February after Abu Dhabi pledged $10 billion to help the emirate meet its obligations. Five-year credit-default swaps on Dubai’s debt fell 135.5 basis points to 405, according to CMA DataVision prices at 10:40 a.m. in London. The Markit iTraxx SovX Western Europe index of swaps on 15 governments dropped 8 basis points to 58.75, according to JPMorgan Chase & Co. Funds from Abu Dhabi, the capital of the United Arab Emirates and owner of the world’s biggest sovereign wealth fund, will help Dubai World unit Nakheel PJSC pay investors the $4.1 billion it owes on Islamic bonds maturing today. State-owned Dubai World roiled markets worldwide when it said Dec. 1 it was in talks with creditors to restructure $26 billion of debt. “A rally on Abu Dhabi’s support is clearly helping Asian and European credit this morning,” Puneet Sharma , head of credit strategy at Barclays Capital in London, wrote in a note to investors. Credit-default swaps on DP World Ltd. , the Middle East’s biggest port operator and a unit of Dubai World, fell 132 basis points to 439, according to CMA. Abu Dhabi slipped 8.5 basis points to 152, while Qatar dropped 9 to 99.5. The decline in default swaps tied to Dubai government debt was the biggest since Feb. 23, when the U.A.E’s central bank bought $10 billion of the Gulf state’s bonds. ‘Very Good News’ Abu Dhabi’s support for its neighbor “will no doubt be taken as very good news by the market,” Gary Jenkins , head of credit research at Evolution Securities Ltd. in London, wrote in a note. Credit-default swaps on European companies also fell on news of the Dubai bailout, with contracts on the Markit iTraxx Crossover Index of 50 mostly high-yield European companies slipping 10.5 basis points to an 18-month low of 473, according to JPMorgan. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 1.5 basis points to 79.25. The Markit iTraxx Financial Index of 25 banks and insurers decreased 2 to 77.5 and the subordinated debt index dropped 3 to 143, JPMorgan prices show. Default swaps on Greek government debt rose 8 basis points to 207.5, CMA prices show. The contracts fell at the end of last week after soaring to a nine-month high on concern the nation would have its credit rating cut because of rising debt. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A basis point on a contract protecting 10 million euros ($14.7 million) of debt from default for five years is equivalent to 1,000 euros a year. To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net Shelley Smith in Hong Kong at ssmith118@bloomberg.net

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Dubai Bond Risk Plunges by Most Since February After Abu Dhabi Pledges Aid

December 14, 2009

By Sarah McDonald and Abigail Moses Dec. 14 (Bloomberg) — The cost of protecting investors against Dubai defaulting on its debt tumbled the most since February after Abu Dhabi pledged $10 billion to help the emirate meet its obligations. Five-year credit-default swaps on Dubai’s debt fell 135.5 basis points to 405, according to CMA DataVision prices at 10:40 a.m. in London. The Markit iTraxx SovX Western Europe index of swaps on 15 governments dropped 8 basis points to 58.75, according to JPMorgan Chase & Co. Funds from Abu Dhabi, the capital of the United Arab Emirates and owner of the world’s biggest sovereign wealth fund, will help Dubai World unit Nakheel PJSC pay investors the $4.1 billion it owes on Islamic bonds maturing today. State-owned Dubai World roiled markets worldwide when it said Dec. 1 it was in talks with creditors to restructure $26 billion of debt. “A rally on Abu Dhabi’s support is clearly helping Asian and European credit this morning,” Puneet Sharma , head of credit strategy at Barclays Capital in London, wrote in a note to investors. Credit-default swaps on DP World Ltd. , the Middle East’s biggest port operator and a unit of Dubai World, fell 132 basis points to 439, according to CMA. Abu Dhabi slipped 8.5 basis points to 152, while Qatar dropped 9 to 99.5. The decline in default swaps tied to Dubai government debt was the biggest since Feb. 23, when the U.A.E’s central bank bought $10 billion of the Gulf state’s bonds. ‘Very Good News’ Abu Dhabi’s support for its neighbor “will no doubt be taken as very good news by the market,” Gary Jenkins , head of credit research at Evolution Securities Ltd. in London, wrote in a note. Credit-default swaps on European companies also fell on news of the Dubai bailout, with contracts on the Markit iTraxx Crossover Index of 50 mostly high-yield European companies slipping 10.5 basis points to an 18-month low of 473, according to JPMorgan. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 1.5 basis points to 79.25. The Markit iTraxx Financial Index of 25 banks and insurers decreased 2 to 77.5 and the subordinated debt index dropped 3 to 143, JPMorgan prices show. Default swaps on Greek government debt rose 8 basis points to 207.5, CMA prices show. The contracts fell at the end of last week after soaring to a nine-month high on concern the nation would have its credit rating cut because of rising debt. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A basis point on a contract protecting 10 million euros ($14.7 million) of debt from default for five years is equivalent to 1,000 euros a year. To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net Shelley Smith in Hong Kong at ssmith118@bloomberg.net

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U.A.E. Shares Advance the Most in a Year, Led by Emaar Property, DP World

December 14, 2009

By Vivian Salama Dec. 14 (Bloomberg) — United Arab Emirates shares surged the most in more than a year after the Abu Dhabi government provided $10 billion to Dubai to help pay debt, including the $4.1 billion needed for Nakheel PJSC’s bond maturing today. Emaar Properties PJSC , the country’s biggest developer, climbed 15 percent, the most permitted by exchange rules. Emirates NBD PJSC , the U.A.E.’s largest lender, added the most since October. DP World Ltd., the Middle East’s biggest ports operator and a unit of Dubai World, climbed to the highest this month. First Gulf Bank PJSC jumped the most since May 2005. The DFM General Index added 10 percent, the biggest intraday gain since October 2008, to 1,866.99 at 11:23 a.m. in the emirate. The measure had tumbled 19 percent since Dubai World on Nov. 25 sought a “standstill” agreement on its debt. The ADX General Index, in the neighboring sheikhdom of Abu Dhabi, rose 7.5 percent. “This is a shot in the arm for the U.A.E. markets,” said Ian Munro , an equity analyst at MAC Capital Advisors in Dubai. “There was some speculation yesterday that this would occur and now that it has, it should really provide the boost needed to take our markets into the new year.” ‘Tackling Concerns’ Abu Dhabi provided $10 billion to Dubai’s Financial Support Fund to help Dubai World, the state-owned holding company, meet its obligations, including Nakheel’s Islamic bond. Dubai will use the rest of the money to pay trade creditors and contractors as well as meet “interest expenses and company working capital through April 30, 2010 — conditioned on the company being successful in negotiating a standstill as previously announced,” the Dubai government said in an e-mailed statement today. Dubai World said Dec. 1 it’s seeking to restructure $26 billion of debt, less than half the $59 billion of liabilities it had at the end of 2008. Nakheel’s bond repayment was the biggest maturity for a Dubai entity since global credit markets froze after the September 2008 collapse of Lehman Brothers Holdings Inc. “This is terrific news,” said Rabih Sultani , a fund manager at Duet Mena Ltd. in Dubai. “The support covers the upcoming Nakheel maturity, it tackles most of Dubai’s longstanding concerns, including support to the banking system, outstanding trade and contractor dues, and most importantly, it confirms the one nation policy.” ‘Skeptical’ Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum said Nov. 9 that those who doubt the unity of Dubai and Abu Dhabi, which holds 8 percent of the world’s oil reserves, should “shut up.” Nakheel accumulated debt during a five-year real-estate boom in Dubai, when the sheikhdom borrowed $10 billion and its state-controlled companies $70 billion to help diversify the economy. Asian stocks and U.S. index futures rebounded from losses. The euro and the pound rallied. Global stocks tumbled following Dubai World’s announcement last month. “Markets tend to change moods fairly quickly, and while I think some damage has been done, a good thing may come from this,” said Marios Maratheftis , Dubai-based economist at Standard Chartered Bank. “Markets will be a bit more skeptical about implicit guarantees. That’s the way it should have been in the first place.” Emaar surged to 3.61 dirhams. Emirates NBD added 4.8 percent, the most since Oct. 25, to 3.29 dirhams. The lender is the biggest creditor to Dubai World with outstanding loans of $3 billion, the Financial Times reported on Dec. 3, citing a banker with knowledge of the debt. DP World , which said last month it is not involved it the restructuring of its parent company, soared 10 percent to 41.9 cents. First Gulf Bank, an Abu Dhabi-based lender owned by the emirate’s ruling family, also added 10 percent to 15.95 dirhams. Oman’s MSM30 Index rose 2.3 percent, Qatar’s benchmark climbed 2.8 percent, Bahrain’s measure advanced 1 percent and the Kuwait Stock Exchange Index increased 0.5 percent. To contact the reporter on this story: Vivian Salama in Dubai vsalama@bloomberg.net

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Abu Dhabi Supplies $10 Billion To Dubai To Cover Debt

December 13, 2009

DUBAI –Dubai’s government Monday said it received $10 billion in financing from Abu Dhabi, which will pay part of the debt held by conglomerate Dubai World and its property unit Nakheel.

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Dubai’s Possible Nakheel Default Tomorrow to Affect Debt of $5.25 Billion

December 13, 2009

By Haris Anwar Dec. 13 (Bloomberg) — Nakheel PJSC’s possible non-payment of its Islamic bond due tomorrow will trigger cross defaults on two other securities, bringing the total of affected debt to $5.25 billion, bond documents show. Investors are waiting to see if the Dubai state-controlled developer will pay the maturing $3.52 billion Islamic bond, known as sukuk. The Dubai government said Nov. 25 state-run holding company Dubai World is seeking a “standstill” agreement on its debt, including for the Nakheel unit. The cross default would trigger if “the Nakheel Holdings Group, Nakheel World or the guarantor shall fail to make any payment,” at the expiration of the grace period, the bond documents said. Tomorrow’s deadline is followed by a 14-day grace period to remedy the default and to prevent bondholders from starting legal proceedings. Nakheel’s other two bonds are a 3.6 billion-dirham ($980 million) floating-rate note due in May next year and a 2.75 percent $750 million sukuk maturing in January 2011. “The chances of a full payment at this point are very slim,” said Nish Popat , head of fixed income at ING Investment Management Dubai Ltd. “There is a lack of clarity on how the standstill initiative is progressing. Investors are just waiting and speculating.” Nakheel’s bond maturing tomorrow rose 1 percent to 53 cents on the dollar on Dec. 11, on speculation that the developer may seek to avoid a default. The bond has dropped more than 50 percent since the Nov. 25 announcement. Dubai World began talks to restructure $26 billion of debt. To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net

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Dubai’s Fallout Makes Financing Tougher as Gulf States Compete for Money

December 11, 2009

By Camilla Hall Dec. 11 (Bloomberg) — The race between Gulf states to build the biggest airport, tallest skyscraper or glitziest hotel is turning into a competition simply to convince banks to keep lending to the oil-rich region. Emirs, presidents and sheikhs of the six members of the Gulf Cooperation Council meet in Kuwait next week with the days of easy credit over following a year of debt defaults and deferred payments. State holding company Dubai World said Dec. 1 it was seeking to restructure $26 billion of borrowing. “Financing will be harder to attract for all companies in and related to the Gulf in the next few quarters as international banks will be loath to have any association with regional corporates and governments, regardless of their stability,” said Emad Mostaque , who helps manage $100 billion at Pictet Asset Management Ltd. in London. While the global financial crisis forced bank bailouts across the western world, in the Gulf it has jeopardized plans to develop securities markets, create flourishing banking centers and forge closer economic ties. At the GCC’s annual meeting in Muscat on Dec. 30 last year, leaders approved a monetary union agreement, a step toward forming a Gulf single currency. Kuwait said this week that the project may take 10 more years to come to fruition. ‘Moral Hazard’ When the two Saudi family holding companies, Ahmad Hamad Algosaibi & Brothers Co. and Saad Group, defaulted on their Bahrain-based banking units earlier this year, the U.A.E. complained that there was no communication within the GCC. The perception that “the money was there and it would just be splashed around regardless of moral hazard or business viability has not been the case,” said Jane Kinninmont , an economist at the Economist Intelligence Unit in London. “If there’s less money to go around, there will be more competition between the Gulf states.” Qatar is building a $14 billion luxury residential project called the Pearl similar to Dubai’s palm-shaped islands. Saudi Arabia is trying to develop its own financial center in Riyadh that will challenge Dubai’s complex of banks including Deutsche Bank AG and Goldman Sachs Group Inc. “It’s healthy to develop competition,” Sheikh Hamad Bin Jabor Bin Jassim al-Thani , director general of Qatar’s General Secretariat for Development Planning said yesterday in Dubai. “We need to embrace where our strengths are and ensure that we focus around them at the initial stage.” Tallest Tower Saudi Arabia’s Kingdom Holding Co., whose chairman is Prince Alwaleed Bin Talal , started a $26.6 billion real estate project that will include the world’s highest tower, overtaking the U.A.E.’s Burj Dubai set to open Jan. 4. “Everyone’s been trying to build the biggest airport, the best tourist infrastructure,” said Kinninmont. “Everyone is trying to compete for the same territory.” Investor confidence has deteriorated as Kuwaiti investment firms Global Investment House KSCC and Investment Dar along with the two Saudi family holding companies defaulted on debt. Global said Dec. 10 it signed an accord to restructure $1.73 billion. Dubai World, whose property unit is building the landmark palm-shaped islands, sought a “standstill” agreement with creditors. Dubai’s benchmark share index is down 22 percent since Nov. 25, while bond prices tumbled and the credit ratings for several Dubai companies were cut. ‘Top Pick’ Saudi Arabia, the Arab world’s biggest economy, is Mostaque’s “top pick” to emerge strongest. The kingdom’s central bank governor, Muhammad al-Jasser , has said that the economy is in recovery and it may avoid a contraction this year as oil prices rebound to what the world’s largest oil exporter deems a “fair price” of $75. Then there’s Qatar. The world’s largest exporter of liquefied natural gas “is a strong story,” according to Marios Maratheftis , a Dubai-based economist at Standard Chartered Plc. The Gulf state is forecasting economic growth of 9 percent this year and 16 percent next year. “The economies that have better balance sheet structures will recover a lot quicker,” said Ahmet Akarli , a London-based economist at Goldman Sachs. “Saudi Arabia has a healthier balance sheet, so does Qatar, even Abu Dhabi is in a good position but Dubai will drag the U.A.E. down.” To contact the reporter on this story: Camilla Hall in Dubai at chall24@bloomberg.net

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Dubai Group Said to Raise $114 Million Selling Stake in Egypt’s EFG-Hermes

December 10, 2009

By Ambereen Choudhury and Arif Sharif Dec. 10 (Bloomberg) — Dubai Group LLC, an investment company owned by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum , raised about $114 million by selling a 6.5 percent stake in Egyptian investment bank EFG-Hermes Holding SAE , two people familiar with the deal said. Dubai Group unit Dubai Financial yesterday sold 25 million shares at 25 Egyptian pounds each in EFG-Hermes, the biggest publicly traded Arab investment bank, the people said, declining to be identified because the sale is not public yet. Dubai Group bought a 25 percent stake in Cairo-based EFG- Hermes for $1.1 billion in November, 2007 from private equity investor Abraaj Capital Ltd. Dubai Group is owned by Dubai Holding LLC, whose interests span real estate, hospitality and finance. Spokesmen from Dubai Group and EFG-Hermes could not immediately be reached for comment. Dubai World, a state-owned holding company, said Dec. 1 it was seeking to restructure $26 billion of debt. Dubai Holding, Dubai Holding Commercial Operations Group LLC, Borse Dubai Ltd. and Dubai Sukuk Center Ltd. may join Dubai World in restructuring debt that could take the total value of problem loans to $46.7 billion, Morgan Stanley said in a report. To contact the reporter on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net ; Arif Sharif in Dubai at asharif2@bloomberg.net

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Nakheel Had First-Half Loss of $3.65 Billion on Writedowns, Document Shows

December 8, 2009

By Arif Sharif Dec. 8 (Bloomberg) — Nakheel PJSC, the Dubai World-owned property developer seeking to renegotiate debt, had a first-half loss of 13.4 billion dirhams ($3.65 billion) as revenue fell and it wrote down the value of land and property, according to a document obtained by Bloomberg News. The loss for the company, which is building palm tree- shaped islands off the emirate’s coast, compared with a year- earlier profit of 2.65 billion dirhams, according to its financial statement for the six months to June. Revenue fell 78 percent to 1.97 billion dirhams. A spokesman for Dubai World, Nakheel’s parent, declined to comment. Dubai World began talks last week with banks to restructure $26 billion of debt, including a $3.52 billion Islamic bond of Nakheel maturing on Dec. 14. Dubai World held talks yesterday with its six main creditors, according to a banker familiar with the negotiations. To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Stocks in U.S. Advance, Dollar Falls as Bernanke Says Inflation May Slow

December 7, 2009

By Justin Carrigan Dec. 7 (Bloomberg) — The yen strengthened and the dollar rose to its highest level in a month against the euro as investors weighed whether the world economy is recovering fast enough to warrant higher central bank interest rates. Gold headed for the steepest two-day retreat since October 2008. The yen advanced against all 16 most-traded currencies tracked by Bloomberg at 12:13 p.m. in New York. The dollar gained versus 12. The MSCI Emerging Markets Index dropped for a second straight day as Dubai’s equity index plunged 5.8 percent to a four-month low. Gold fell 1.9 percent in New York, while crude oil dropped a fourth consecutive day. European equities fell, while the Standard & Poor’s 500 Index rallied. Federal Reserve Chairman Ben Bernanke speaks today for the first time since the Dec. 4 U.S. employment report signaled a surprise drop in the jobless rate , stoking expectations the Fed may raise rates sooner than economists had anticipated. Investors are concerned banks may have to increase writedowns that have reached $1.7 trillion worldwide since the credit crunch began, as Dubai World seeks to delay payment on $26 billion of debt. “Not only are commodities falling because of strength in the dollar, traders and investors are easing up on their inflation fears and on their hedges on the U.S. dollar,” said Kathy Lien , New York-based director of currency research with online currency trader GFT Forex. “One of the primary reasons why traders or investors have piled into gold is because of the belief that the Federal Reserve is going to be behind the curve on tightening monetary policy.” Yen, Dollar Gain The yen rose most against higher-yielding currencies, advancing 1.8 percent versus the New Zealand dollar. The U.S. dollar traded at its highest level since Nov. 4 versus the euro, extending gains made at the end of last week that followed the U.S. employment report. Treasury two-year notes advanced on speculation Bernanke may try to damp optimism about the strength of the economic recovery in his speech today. The benchmark two-year note yield fell four basis points to 0.80 percent. The U.S. lost 11,000 jobs in November, less than the 125,000 median forecast of 82 economists in a Bloomberg survey, the Labor Department said Dec. 4. Fed-funds futures contracts on the Chicago Board of Trade showed today a 16 percent probability the central bank will increase its benchmark overnight rate to at least 0.5 percent by March, up from 11 percent a week ago. Gold futures for February delivery in New York extended their decline since Dec. 3 to 5.8 percent, falling to $1,147.90 an ounce as the Dollar Index’s advance curbed the metal’s appear as an alternative asset. Four-Day Retreat Crude oil futures slumped 1.5 percent and have now lost 5.2 percent since Dec. 1. The Reuters/Jefferies CRB Index of commodities declined for a fourth day, the longest losing streak since August. The Dubai Financial Market General Index sank the most among benchmark equity indexes worldwide. The measure has tumbled 17 percent since Dubai announced on Nov. 25 that state- owned Dubai World would ask creditors for a “standstill” agreement on its debt, including property company Nakheel PJSC’s $3.5 billion bond due for repayment in a week. Russia’s Micex Index dropped 1.5 percent as oil company OAO Rosneft sank on falling crude prices. South Africa’s FTSE/JSE Africa All Shares Index declined 0.9 percent, after gold producer AngloGold Ashanti Ltd. retreated 3.7 percent. Europe, U.S. Stocks The Dow Jones Stoxx 600 Index, the benchmark for European stocks, slumped 0.5 percent. Fresnillo Plc, the world’s largest primary silver producer, led basic-resources producers lower in London, losing 1.89 percent. Siemens AG, Europe’s biggest engineering company, slipped 1.6 percent in Frankfurt after Morgan Stanley cut its recommendation. The S&P 500 rose 0.1 percent, adding to last week’s 1.3 percent advance. Cigna Corp. added 4.5 percent, leading gains among health-care companies, after Goldman Sachs lifted its industry rating to “attractive,” citing cheap shares and “limited downside risk under likely outcomes for health reform legislation.” To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net .

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Dubai World May Sell Domestic, Foreign Assets to Repay Debt, Official Says

December 7, 2009

By Arif Sharif and Zahraa Alkhalisi Dec. 7 (Bloomberg) — Dubai World, the state-owned holding company that’s in talks to renegotiate $26 billion of debt, may sell assets in the United Arab Emirates and abroad to repay its borrowings, a government official said. Asset sales are normal to shore up finances in such circumstances, Abdulrahman Al Saleh , director general of Dubai’s Department of Finance and head of the government fund that’s leading the restructuring of Dubai World, said yesterday in an interview with Al Jazeera television. Dubai World’s announcement last week that it would seek to restructure $26 billion of debt, including a $3.5 billion Islamic bond sold by property unit Nakheel PJSC, sparked a 16 percent decline in the country’s benchmark stock index. “There are a lot of assets that could be liquidated at Dubai World to raise much-needed cash,” said Fahd Iqbal , a Dubai-based Persian Gulf equities strategist at Egyptian investment bank EFG-Hermes Holding SAE . “The priority would be to dispose of some of the international assets.” Dubai World owns 80 percent of DP World Ltd. , the world’s fourth-biggest port operator and the Jebel Ali Free Zone , a business park adjoining its flagship Jebel Ali port in Dubai. Its Istithmar division bought New York luxury retailer Barneys in 2007 for $942.3 million, while Dubai World itself acquired a $5.1 billion stake in U.S. casino company MGM Mirage in 2008. The aim of Dubai World’s restructuring is to ensure it survives in the new environment, Al Saleh said, according to Al Jazeera. Dubai World will delay projects it hasn’t started because of the credit crisis, Al Saleh told the broadcaster. Building Boom Dubai World, one of the emirate’s three main state-related holding companies, is one of two groups that have led a building boom in Dubai alongside Emaar Properties PJSC . Nakheel is building palm tree-shaped islands off the coast while Limitless LLC, its other property unit, is building the Downtown Jebel Ali residential project in Dubai and has planned urban developments in Saudi Arabia, Jordan and Russia. Nakheel’s two malls in Dubai, Ibn Battuta and DragonMart, may be valuable since they yield regular revenue, Hermes analysts led by Fahd Iqbal said in a Dec. 3 report. The group’s most valuable asset would be Istithmar’s stake in London-based Standard Chartered Plc , the analysts said. The 2.2 percent holding is valued at about $1.07 billion, according to data compiled by Bloomberg. “The restructuring process will obviously include discussion over the sale of assets,” Farouk Soussa , a Standard & Poor’s credit analyst said today at a conference in Dubai. “Nothing can be excluded.” To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net Zahraa Alkhalisi in Dubai at zalkhalisi@bloomberg.net

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Dubai World May Sell Domestic, Foreign Assets to Repay Debt, Official Says

December 7, 2009

By Arif Sharif and Zahraa Alkhalisi Dec. 7 (Bloomberg) — Dubai World, the state-owned holding company that’s in talks to renegotiate $26 billion of debt, may sell assets in the United Arab Emirates and abroad to repay its borrowings, a government official said. Asset sales are normal to shore up finances in such circumstances, Abdulrahman Al Saleh , director general of Dubai’s Department of Finance and head of the government fund that’s leading the restructuring of Dubai World, said yesterday in an interview with Al Jazeera television. Dubai World’s announcement last week that it would seek to restructure $26 billion of debt, including a $3.5 billion Islamic bond sold by property unit Nakheel PJSC, sparked a 16 percent decline in the country’s benchmark stock index. “There are a lot of assets that could be liquidated at Dubai World to raise much-needed cash,” said Fahd Iqbal , a Dubai-based Persian Gulf equities strategist at Egyptian investment bank EFG-Hermes Holding SAE . “The priority would be to dispose of some of the international assets.” Dubai World owns 80 percent of DP World Ltd. , the world’s fourth-biggest port operator and the Jebel Ali Free Zone , a business park adjoining its flagship Jebel Ali port in Dubai. Its Istithmar division bought New York luxury retailer Barneys in 2007 for $942.3 million, while Dubai World itself acquired a $5.1 billion stake in U.S. casino company MGM Mirage in 2008. The aim of Dubai World’s restructuring is to ensure it survives in the new environment, Al Saleh said, according to Al Jazeera. Dubai World will delay projects it hasn’t started because of the credit crisis, Al Saleh told the broadcaster. Building Boom Dubai World, one of the emirate’s three main state-related holding companies, is one of two groups that have led a building boom in Dubai alongside Emaar Properties PJSC . Nakheel is building palm tree-shaped islands off the coast while Limitless LLC, its other property unit, is building the Downtown Jebel Ali residential project in Dubai and has planned urban developments in Saudi Arabia, Jordan and Russia. Nakheel’s two malls in Dubai, Ibn Battuta and DragonMart, may be valuable since they yield regular revenue, Hermes analysts led by Fahd Iqbal said in a Dec. 3 report. The group’s most valuable asset would be Istithmar’s stake in London-based Standard Chartered Plc , the analysts said. The 2.2 percent holding is valued at about $1.07 billion, according to data compiled by Bloomberg. “The restructuring process will obviously include discussion over the sale of assets,” Farouk Soussa , a Standard & Poor’s credit analyst said today at a conference in Dubai. “Nothing can be excluded.” To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net Zahraa Alkhalisi in Dubai at zalkhalisi@bloomberg.net

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Dubai World May Sell Domestic, Foreign Assets to Repay Debt, Official Says

December 7, 2009

By Arif Sharif and Zahraa Alkhalisi Dec. 7 (Bloomberg) — Dubai World, the state-owned holding company that’s in talks to renegotiate $26 billion of debt, may sell assets in the United Arab Emirates and abroad to repay its borrowings, a government official said. Asset sales are normal to shore up finances in such circumstances, Abdulrahman Al Saleh , director general of Dubai’s Department of Finance and head of the government fund that’s leading the restructuring of Dubai World, said yesterday in an interview with Al Jazeera television. Dubai World’s announcement last week that it would seek to restructure $26 billion of debt, including a $3.5 billion Islamic bond sold by property unit Nakheel PJSC, sparked a 16 percent decline in the country’s benchmark stock index. “There are a lot of assets that could be liquidated at Dubai World to raise much-needed cash,” said Fahd Iqbal , a Dubai-based Persian Gulf equities strategist at Egyptian investment bank EFG-Hermes Holding SAE . “The priority would be to dispose of some of the international assets.” Dubai World owns 80 percent of DP World Ltd. , the world’s fourth-biggest port operator and the Jebel Ali Free Zone , a business park adjoining its flagship Jebel Ali port in Dubai. Its Istithmar division bought New York luxury retailer Barneys in 2007 for $942.3 million, while Dubai World itself acquired a $5.1 billion stake in U.S. casino company MGM Mirage in 2008. The aim of Dubai World’s restructuring is to ensure it survives in the new environment, Al Saleh said, according to Al Jazeera. Dubai World will delay projects it hasn’t started because of the credit crisis, Al Saleh told the broadcaster. Building Boom Dubai World, one of the emirate’s three main state-related holding companies, is one of two groups that have led a building boom in Dubai alongside Emaar Properties PJSC . Nakheel is building palm tree-shaped islands off the coast while Limitless LLC, its other property unit, is building the Downtown Jebel Ali residential project in Dubai and has planned urban developments in Saudi Arabia, Jordan and Russia. Nakheel’s two malls in Dubai, Ibn Battuta and DragonMart, may be valuable since they yield regular revenue, Hermes analysts led by Fahd Iqbal said in a Dec. 3 report. The group’s most valuable asset would be Istithmar’s stake in London-based Standard Chartered Plc , the analysts said. The 2.2 percent holding is valued at about $1.07 billion, according to data compiled by Bloomberg. “The restructuring process will obviously include discussion over the sale of assets,” Farouk Soussa , a Standard & Poor’s credit analyst said today at a conference in Dubai. “Nothing can be excluded.” To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net Zahraa Alkhalisi in Dubai at zalkhalisi@bloomberg.net

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Dubai World May Sell Domestic, Foreign Assets to Repay Debt, Official Says

December 7, 2009

By Arif Sharif and Zahraa Alkhalisi Dec. 7 (Bloomberg) — Dubai World, the state-owned holding company that’s in talks to renegotiate $26 billion of debt, may sell assets in the United Arab Emirates and abroad to repay its borrowings, a government official said. Asset sales are normal to shore up finances in such circumstances, Abdulrahman Al Saleh , director general of Dubai’s Department of Finance and head of the government fund that’s leading the restructuring of Dubai World, said yesterday in an interview with Al Jazeera television. Dubai World’s announcement last week that it would seek to restructure $26 billion of debt, including a $3.5 billion Islamic bond sold by property unit Nakheel PJSC, sparked a 16 percent decline in the country’s benchmark stock index. “There are a lot of assets that could be liquidated at Dubai World to raise much-needed cash,” said Fahd Iqbal , a Dubai-based Persian Gulf equities strategist at Egyptian investment bank EFG-Hermes Holding SAE . “The priority would be to dispose of some of the international assets.” Dubai World owns 80 percent of DP World Ltd. , the world’s fourth-biggest port operator and the Jebel Ali Free Zone , a business park adjoining its flagship Jebel Ali port in Dubai. Its Istithmar division bought New York luxury retailer Barneys in 2007 for $942.3 million, while Dubai World itself acquired a $5.1 billion stake in U.S. casino company MGM Mirage in 2008. The aim of Dubai World’s restructuring is to ensure it survives in the new environment, Al Saleh said, according to Al Jazeera. Dubai World will delay projects it hasn’t started because of the credit crisis, Al Saleh told the broadcaster. Building Boom Dubai World, one of the emirate’s three main state-related holding companies, is one of two groups that have led a building boom in Dubai alongside Emaar Properties PJSC . Nakheel is building palm tree-shaped islands off the coast while Limitless LLC, its other property unit, is building the Downtown Jebel Ali residential project in Dubai and has planned urban developments in Saudi Arabia, Jordan and Russia. Nakheel’s two malls in Dubai, Ibn Battuta and DragonMart, may be valuable since they yield regular revenue, Hermes analysts led by Fahd Iqbal said in a Dec. 3 report. The group’s most valuable asset would be Istithmar’s stake in London-based Standard Chartered Plc , the analysts said. The 2.2 percent holding is valued at about $1.07 billion, according to data compiled by Bloomberg. “The restructuring process will obviously include discussion over the sale of assets,” Farouk Soussa , a Standard & Poor’s credit analyst said today at a conference in Dubai. “Nothing can be excluded.” To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net Zahraa Alkhalisi in Dubai at zalkhalisi@bloomberg.net

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Law firms navigate foggy Dubai regulation as UK awaits asset sale

December 7, 2009

Dubai’s longest holiday of the year, the emirate’s government announced it would be requesting a six-month debt standstill from creditors to its wholly-owned ­holding company Dubai World. In addition to this, some units of the business, including

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Law firms navigate foggy Dubai regulation as UK awaits asset sale

December 7, 2009

Dubai’s longest holiday of the year, the emirate’s government announced it would be requesting a six-month debt standstill from creditors to its wholly-owned ­holding company Dubai World. In addition to this, some units of the business, including

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Law firms navigate foggy Dubai regulation as UK awaits asset sale

December 7, 2009

Dubai’s longest holiday of the year, the emirate’s government announced it would be requesting a six-month debt standstill from creditors to its wholly-owned ­holding company Dubai World. In addition to this, some units of the business, including

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