Within its portfolio there is Dubai Ports World, the third-largest port operator on the globe, and Nakheel, a real estate developer associated with the Palm Islands.
A timeline:
- Wednesday, November 25, the government announced that the company "intends to ask all providers of financing to Dubai World and Nakheel to 'standstill' and extend maturities until at least 30 May 2010". Thus "standstill" includes payments due for next month.
- Thursday, November 26, the US markets were closed for Thanksgiving. Asian markets took a hit on the news, though, in the wake of reports that some of Japan's bigest banks were heavily exposed to Dubai World.
- Friday, November 27, Markets in the US started down big, but seemed to discount the significance of thre news as the day went on.
- Saturday, November 28, The National, an English language paper based in the United Arab Emirates, reported that Dubai World "could still meet the December 14 deadline on the US$4 billion ... payment of a sukuk from Nakheel under one option being considered by advisors to the conglomerate." It is also considering an 80% redemption offer.
Today, the UAE's central banks is making reassuring noises about "standing behind" that country's banks.
One intriguing feature of the situation involves the sukuk bonds involved. Any default, or lesser "credit event" here will compound some of the uncertainties I discussed on May 19 in this blog.
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