Dubai World may offer 60% on money owed
Dubai stocks fell again, though only slightly, and the price of insuring against a default in the city-state rose on Monday, on the second day of market upheaval following news that flagship corporation Dubai World may offer creditors just 60% of the money they are owed as part of a deal to reschedule $22 billion in debt.Full article at the WSJ.
More:
The wider spread [r.e. credit default swap insurance] reflects "a combination of…a massive debt buildup, overreliance on short-term debt of variable quality and help by a wealthy neighbor," said credit strategists at BNP Paribas SA in a note to clients. "While all eyes are on Greece, it is worth keeping an eye on the situation in Dubai where considerable uncertainty prevails."
Labels: Dubai debt
posted by John B. Chilton at 2/16/2010 04:13:00 PM
2 Comments:
If local laws dictate that debtors be imprisoned if they don't pay their debts, then Sheikh Mo should also be imprisoned for not being able to pay off his massive debt. After all, Sheikh Mo owns like 99.9% of Dubai World last time I checked. Therefore, Dubai World's debt = Sheikh Mo's debt.
If you're going to imprison someone over hundreds of dollars in debt, it only makes sense to do the same with someone that owes billions of dollars. Or to be consistent with Sheikh Mo's treatment, all debtors in the UAE could be pardoned. It's only fair - it's the same situation as the Parable of the Unforgiving Debtor in the Bible. But alas, this is the Gulf Arab world where equality and justice are more foreign than most of the expats living therein.
Dubai went down in a handbasket a long time ago and people have just started realizing this for a fact.
Well, as they say, it's never too late to come out of hibernation.
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