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Dubai debt deal expected this week: bankers
Sun Mar 7, 2010 11:41am EST
Credit: Reuters/Matthias Seifert
DUBAI (Reuters) - Troubled conglomerate Dubai World expects to put its debt plan to creditors as early as this week but the final proposal is being delayed by efforts to accurately value developer Nakheel's assets, bankers said on Sunday.

Dubai World's plan for repaying $26 billion in debt will not include a proposal to raise capital or contain any surprises, one of the bankers said, such as the repayment of Nakheel's Islamic bond in December after a last-minute bailout by Abu Dhabi.

The bankers spoke on condition of anonymity.

A Dubai World spokesperson declined to comment.

Valuing Nakheel's assets and determining the size of any financial help from the Dubai and Abu Dhabi governments would determine the size of the haircuts creditors would have to take.

Dubai is unable to contribute much while Abu Dhabi will be selective in its aid.

The debt plan comes after Dubai said in November it wanted a standstill on repayment until the end of April and give the conglomerate time to restructure. Abu Dhabi's full $10 billion aid -- which includes $5 billion from two banks linked to the wealthy emirate -- is conditional on Dubai World reaching a satisfactory deal with creditors.

Nakheel, developer of man-made islands in the shape of palms and a map of the world, has a $980 million bond due in May, after the defacto standstill period ends, but is expected to be part of the broader Dubai World restructuring.

The bond's underlying assets are the revenue stream that developed projects would eventually generate, and not the land it owns.

MARKETS RISE ON DEBT HOPES

Dubai's index rose 2.3 percent, its largest gain for six weeks on Sunday, bolstered by market talk that Dubai World's debt restructuring would be more favorable to lending banks than previously thought.

"People are saying an announcement may soon come from Dubai World and what's being offered will not be as bad as feared, so some investors are building positions now to stay ahead of the curve," said Mohammed Yasin, Shuaa Securities chief executive.

The cost of insuring five-year Dubai debt against default fell below 500 basis points for the first time in more than a month on Friday. Analysts said the rebound was mainly due to an improvement in market sentiment.

The five-year credit default swaps (CDS) traded at 499 basis points on Friday according to data from Markit. They had risen as high as 654 basis points on February 15 after a report that Dubai World was mulling a two-part deal, including one that may repay lenders 60 percent of the outstanding debt over a period of seven years.

"The rise in Dubai's CDS levels were probably overdone and the global environment has improved, particularly with regards to Greece," said Eric Swats, head of asset management at Rasmala Investments.

Nish Popat, head of fixed income at ING Investment Management, said there was a view that sovereign CDS prices had widened too far.

"The other factor is the active involvement of the federal government and the central bank in the (Dubai debt) discussions, which has showed people there will be a potential positive outcome going forward," he said.

Last week, a United Arab Emirate's central bank official, speaking in Jordan, was quoted as saying that Dubai World had set up a strategy to address the debt crisis.

(Additional reporting by Matt Smith; Writing by Amran Abocar; Editing by Jon Loades-Carter)

How dare you bring your negativity on this forum. Nakheel has tonnes of cash everything is tickety boo - Manal Shaheen has been re-employed, Sultan bin Sulayem really DOES have his passport and Chris O'Donnell does not have a care in the world - I even hear that the traditional 87% salary increase for the truly wise men in white dresses has also been approved !

In short nothing to see here - move along . There you go S&O saved you a job or is even that not blinkered enough.

viking-warrior wrote:How dare you bring your negativity on this forum. Nakheel has tonnes of cash everything is tickety boo - Manal Shaheen has been re-employed, Sultan bin Sulayem really DOES have his passport and Chris O'Donnell does not have a care in the world - I even hear that the traditional 87% salary increase for the truly wise men in white dresses has also been approved !

In short nothing to see here - move along . There you go S&O saved you a job or is even that not blinkered enough.

Now that's funny!!!

Shouldn't u all be worried about your sorry countries and it's hundred of bankrubt companies,banks and goverments and it's unemployment rate ? I mean you guys will endup going back there so it's more useful you concentrating on that rather than a UAE.

I love this i phone browsing ,it's good being rich

uaekid wrote:Shouldn't u all be worried about your sorry countries and it's hundred of bankrubt companies,banks and goverments and it's unemployment rate ? I mean you guys will endup going back there so it's more useful you concentrating on that rather than a UAE.

I love this i phone browsing ,it's good being rich

This Arab doesn't have a clue what it means when the Western fooks leave. Dude, you'll be all alone with your i-phone and Iran is already lurking at you to send a few S-300's up yours. When that happens, the expats are gone and took their technology with them, nukes back to France and the US, so you can get back to old school stone throwing...

So reasonably said, you don't have a nickel to scratch with, let alone Nakheel. Of course they go bankrupt. Its written in mesopotamian clay tablets. Back to eating mudpies for you Kid.

Bora Bora wrote:

viking-warrior wrote:How dare you bring your negativity on this forum. Nakheel has tonnes of cash everything is tickety boo - Manal Shaheen has been re-employed, Sultan bin Sulayem really DOES have his passport and Chris O'Donnell does not have a care in the world - I even hear that the traditional 87% salary increase for the truly wise men in white dresses has also been approved !

In short nothing to see here - move along . There you go S&O saved you a job or is even that not blinkered enough.

Now that's funny!!!

uaekid wrote:Shouldn't u all be worried about your sorry countries and it's hundred of bankrubt companies,banks and goverments and it's unemployment rate ? I mean you guys will endup going back there so it's more useful you concentrating on that rather than a UAE.

I love this i phone browsing ,it's good being rich

Well it's no secret how some get rich.

Maybe you can show some brotherly love and pass on a few million to Nakheel and help them out.

Considering they haven't paid anyone (Contractor / Consultant / Project Manager)in over a year sounds like they are already bankrupt to me.

Hey, UAE kid, maybe you should buy my Visit Dubai web-site which tops the Visit Dubai Google UK search and is 2nd in Google.com search?
Then you could really MARKET Dubai property and holidays across the world and bring more buyers and holidaymakers to Dubai,to help your country. Dubaians should be doing that .
I seriously think that Dubai needs to MARKET MORE of what it has already got, instead of starting more construction schemes that it can't finish and can't afford in the first place!!

MARKETING is small money compared to all this mega building work .

I have the Visit Dubai web-site on the market. UAE kid....You are on the spot to bring Real Estate and hotel people on board and improve and expand the web-site. The domain name is the BEST !

SELL DUBAI TO THE WORLD !!!