Wednesday, February 14, 2007

'Booming' Dubai set to borrow $10bn+ ::

Dubai Government seeks to borrow at least $10bn by 2009, as the emirate’s ambitious expansion plans begin to outpace revenues from its oil, which is expected to run dry within 20 years.

Such borrowing would be used to fund the road, rail, power and water desalination infrastructure necessary to achieve Dubai's ambitious plans for economic growth, which the emirate's ruler forecasts will hit 11% per year until 2015.

This will require borrowing that will “go into double-digit billions” by 2009, according to Nasser Akil Abbas, treasury director at Dubai government’s finance department, quoted by Bloomberg.
Dubai is seeking a credit rating in order to achieve this, and its Department of Finance is drawing up a strategy with advice from JP Morgan and Swiss bank UBS, according to a senior official.
It was previously reported that Dubai's government planned to issue $4 billion worth of dollar-denominated bonds in the international market to fund infrastructure projects, according to a Dubai official last year.
In the meantime, Dubai continues to invest billions overseas.

Let's put it this way. If you are buying real estate in Dubai, make sure it doesn't make your portfolio undiversified.

Thanks to Shiva for the pointer.


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