Dubai Debt May Exceed $80 Billion on Off-Balance Sheet Liability, UBS Says

Discussion in 'Wall St. News' started by Daal, Nov 27, 2009.

  1. Daal


  2. ohh boy the castle of cards is about to fall apart

    wait until the US markets open on monday

    meanwhile i expect a couple of reassuring messages from our corrupt leaders saying everything is OK and our big boys are all too big to fail.
  3. us markets are open today
  4. If the subprime event taught us anything, its that the actual amount of debt is somewhat irrelevant.

    So the nominal amount may be $80 billion ... so what. What's important is that there are CDS contracts written to insure that debt. The debt could also have been inside of CDOs, which in turn, were put inside of other CDOs. None of this stuff actually has to have the underlying debt behind it. In other words, that $80 billion in debt means that there is some number WAY NORTH of $80 billion at risk should this default happen.
  5. Yeh exactly, people made the same mistake with the subprimes, I still remember a whole swath of commentators dismissing the issue because subprime was only 200bn or something, irrelevent to the size of the econ they said.
  6. I don't know if anybody follows golf too much, but the grand finale of the European tour was held in Dubai last week (The Race to Dubai). I couldn't help noticing that the hottest young player on the planet - Rory McIllroy had Jumeirah logos all over his shirts and hats. Several other players did as well. Jumeirah is owned by Dubai Property. I hope these guys got their payment up front!
  7. Why, is everyone going to ignore it on Friday?

  8. Crappy little Dubai having trouble with a lousy 60 billion and the market is taking a 200 point hit? What's going to happen when the U.S. finally admits we can't pay the trillions we owe and the dollar falls in to a black hole?
  9. my bad i am a clueless european that dont uses google to find the US market holiday schedule, before posting on ET.

  10. toc


    The United Arab Emirate (UAE) has total debt amounting to $184 billion at the end of 2009, according to estimates by Bank of Dubai America-Merrill Lynch, which said the region faces a heavy redemption schedule until 2013.

    Dubai's shock announcement this week that it is seeking to suspend payments on debt of its state-owned conglomerate Dubai World and property subsidiary Nakheel has roiled global markets, raising fears that the emirate which funded a spectacular building boom on a mountain of debt could default.

    BofA-Merrill Lynch said in a report that the restructuring undertaken by Dubai would be a serious blow to the Gulf region's economic recovery prospects, adding that the scale of the region's debt was now the issue.

    "The lack of official debt data may add up to uncertainty and cause higher risk premiums," it said.

    Of the $184 billion UAE debt, Dubai holds $88 billion while Abu Dhabi accounts for $90 billion. BofA-Merrill Lynch said the debt servicing cost will be higher than these estimates as their numbers only include the principal payments.

    The bank said Dubai faces almost $50 billion of debt amortization in the next three years: $12 billion in 2010, $19 billion in 2011 and $18 billion in 2012.

    "We estimate the total debt for Dubai World as $26.5 billion, 80 percent of which needs to be paid back in the next three years," added BofA-Merrill.
    #10     Nov 27, 2009