North Africa/Middle East

Dubai has received a financial boost thanks to an agreement to refinance at preferential rates $20bn of bonds and loans owed to the central bank of the United Arab Emirates and its capital, Abu Dhabi, the Financial Times reported. The Gulf’s commercial hub, which has an overall debt load of about $130bn, said it extended the maturities for five years at interest rates of one per cent, below the four per cent agreed in 2009 when the UAE came to Dubai’s rescue.

Dubai’s global financial crisis-induced slump, followed by a less dramatic, but equally sharp, recovery make for a compelling story. The endless flow of positive news in the desert emirate culminated late last year in Dubai winning the hosting rights for World Expo 2020, The Wall Street Journal Middle East Real Time blog reported. But the smart people at Bank of America Merrill Lynch are a little more sober in their analysis of Dubai’s rebound. Afterall, there’s still some pretty significant financial hurdles for the city’s government-related entities to clear.

State-owned investment firm Dubai Group announced its long-awaited $10 billion debt restructuring deal with creditors late on Thursday. While all bankers and advisors who took part in the often acrimonious negotiations breathed a sigh of relief, most of them are also aware that Dubai’s debt problems aren’t quite a thing of the past yet, The Wall Street Journal Middle East Real Time blog reported.

Zim, the Haifa-based container shipping line, said it had agreed a debt restructuring deal in which its owner, Israel Corp, will hand control of two-thirds of the box carrier to creditors and pave the way for its own planned demerger, the Financial Times reported. Under the deal, announced on Thursday, bondholders, shareholders, overseas banks and shipowners will swap some of Zim’s $3bn in debt for shares.

Dubai Group LLC, an investment company owned by the emirate’s ruler, said it reached a final agreement with lenders on $6 billion in debt restructuring after three years of talks, Bloomberg News reported. Lenders agreed to extend the maturity for secured debt to December 2016, and for partially secured and unsecured loans to December 2024, Dubai Group said in an e-mailed statement today. A further $4 billion of “related party debt has been subordinated to the claims of the bank creditors,” it said.

Dubai Group has signed a $10 billion debt restructuring deal, two sources with knowledge of the matter told Reuters, marking the end of a perilous period which saw the emirate risk collapse under a mountain of debt obligations, Reuters reported. The unit of Dubai Holding, the investment vehicle of Dubai's ruler, was one of a number of state-linked entities which borrowed heavily from banks to fund an acquisitions spree during the boom years of 2006-08.

The Qatar Financial Centre (QFC) has strengthened its insolvency regime to enhance certainty in the financial landscape in a bid to woo more foreign investments, a move that would also see the advent of a new breed of Qatar-based insolvency practitioners. This has been made possible with the QFC Authority (QFCA) amending its insolvency legislation as part of modernising the financial infrastructure of the country.

Nakheel, the Dubai government-owned developer that restructured $16 billion of debt three years ago after being hit by a sharp drop in local real estate prices, is now aiming to pay back much of those borrowings early and eventually become debt-free as property prices climb again, The Wall Street Journal Middle East Real Time blog reported. The company will pre-pay 4 billion U.A.E. dirhams ($1.09 billion) of bank loans originally set to mature next September, chairman Ali Rashid Lootah said on Saturday.

The Index tower on Dubai’s answer to Wall Street has 23 floors of empty offices out of the 25 it opened in 2011, Bloomberg News reported today. The office space in the Index on Sheikh Zayed Road was sold in pieces to nine different investors under a system known as strata title, according to developer Union Properties PJSC, meaning potential tenants face the prospect of having multiple landlords.

An Icelandic court sentenced four former Kaupthing bankers to jail yesterday for market abuses related to a large stake taken in the bank by a Qatari sheikh just before it went under in late 2008, Reuters reported yesterday. Weeks before the country's top three banks collapsed under huge debts as the global credit crunch struck, Kaupthing announced that Sheikh Mohammed Bin Khalifa Bin Hamad al Thani had bought 5 percent of its shares in a confidence-boosting move. A parliamentary commission later said that the shares had been bought with a loan from Kaupthing itself.