bimcnorth

"DUBAI, Feb 22 (Reuters) - The government of Dubai said on Sunday it has launched a $20 billion bond programme to help the Gulf emirate meet its financial obligations and press ahead with development projects.

The central bank of the United Arab Emirates has subscribed to the first issuance of $10 billion worth of the five-year bonds that carry an annual interest rate of 4 percent, the emirate's finance department said in a statement.

The bonds "will secure the necessary funding for Dubai to meet its financial obligations and continue its development programme", said the emirate"



Well, we can just sit back and see what concessions the Maktoums have given their cousins in Abu Dhabi then..
But on a strictly business agenda more Al-Nahyan control (all that lovely cash) of Dubai would be welcomed no doubt.

CeeBee

Hmm......we'll see. i love this city....i hope it pulls out of it's current (worsening) situation.

Smacked

Does this mean that Dubai will recover faster than the others? I hope it does, Dubai rocks!

bimcnorth

What others are you thinking about?

benzonar

Ulan Bator I think

Smacked

The rest of the world!!!!

bimcnorth

Well, given that places like Abu Dhabi, Saudi and Qatar are very much business as usual they have a good chance to recover quickly if they sort out their finances so I wouldn´t rule it out..But my bet is on China to take the lead of the global recovery and the rest to follow.

It also helps to have Abu Dhabi as sugar daddy of course, they could throw a $100bn at Dubai without breaking a sweat but that would mean a total takeover so it´s hardly likely.
Money like $10bn and such just dent their SWF inflow without having any impact to their finances as such.

Smacked

So what you're saying is that if Abu Dhabi bails ou Dubai, it will be called what ABUDUBAI or something. Will that mean change of laws etc.

bimcnorth

Hehe, no..Dubai is already a part of a federal country (UAE) who are dominated by the capital Abu Dhabi.
Each emirate are financially independet though, if the Maktoums that rule Dubai want the Al-Nahyans in Abu Dhabi to help them out financially (Abu Dhabi is unbelievably rich) they might do so but if to much Al-Nahyan money flows into Dubai seeking assets to buy they will in the end own Dubai.

lionheart

Does your mum know you are on here?

Mr Moleskins

Ah - the editor of newsnight joins the debate.

klaus3974

OK, 20 Billion $ is a lot of money for you and me but you need to put the number in perspective. Assuming the bond is fully subscribed and they get the 20 B$... Dubai has to refinance debt for $15 Billion only in 2009 and for a similar amount in 2010. Do the maths... at most the 20 Billion will allow a soft landing of the economy but do not expect Dubai 2007/8 to be back! They are trying to cut the loses, not thinking of new palm islands.

Spugsy

heh.

Smacked

Nah, I secretly get to the computer while she is asleep.

W10

Is there any doubt it won't be fully subscribed? The rest will be taken up with Abu Dhabi SWFs and quite possibly the debt will eventually be forgotten/written off.

From my position as a layman, the struggle Dubai had to refinance the Bourse Dubai loan probably facilitated this deal coming through so quickly. Dubai had basically admitted that it cannot get refinancing for its debts with that issue...

But while it is welcome, it only postpones problems (for reasons you outlined above), and lets remember. The fundamentals of Dubai's growth - construction/property, tourism - are still royally screwed, and will be for some time to come.