Dubai World to meet with creditor panel to discuss debt crisis

Posted Dec 2nd 2009 4:30PM by Connie Madon
Filed under: Major Movement, International Markets, Rumors, Press Releases, Middle East, Market Matters, Headline News, Financial Crisis

The Dubai crisis is not going away. Government owned Dubai World has scheduled a meeting with creditors to discuss the possible settlements.

What is most troubling is that the government of Dubai has refused to guarantee Dubai World's debt. That creates an international situation. While it has not been confirmed, it is believed that Standard Chartered Bank, HSBC, Lloyds, Royal Bank of Scotland and local lenders Emirates NBD, Abu Dhabi Commercial Bank are key creditors.

Dubai World is requesting a six month standstill for two of its subsidiaries, Limtless and Nakheel. What is extremely worrisome is that Nakheel's $3.52 billion of Islamic bonds mature on December 14.

The media is playing down the crisis, but nevertheless there is concern that Dubai's troubles could spread and create a deeper world crisis.

One consequence of the Dubai situation could be a downgrade of UAE banks.

Another indication that all is not well, is a continued rally in gold, today pushing to new all time highs. Investors are running for cover and the security of gold.

Do you believe that the crisis will spread to other countries?

Tags: dubai, featured, nakheel