Etihad Airways and Abu Dhabi's Department of Finance are likely to reject calls for a meeting with disgruntled bond investors in the belief that their complaints have no legal merit, sources close to the matter told Reuters. In 2015 and 2016 Etihad issued $1.2 billion in bonds in a partnership with airlines it partly owned at the time, including Alitalia and Air Berlin, the International New York Times reported on a Reuters story. The bonds are now in default because the European airlines, which are now insolvent, have not honoured their part of the obligations.

Bahrain said Thursday that Kuwait, Saudi Arabia and the United Arab Emirates pledged $10 billion to support the island kingdom, helping it avoid defaulting on loans as it tries to restructure its finances, the International New York Times reported on an Associated Press story. Bahrain, though the first Arab nation in the Persian Gulf to strike oil, had faced the specter of defaulting on a $750 million Islamic bond repayment due on Nov. 22.

A group of creditors to entities set up to finance affiliates of Etihad Airways said in a letter to the airline they were misled on its commitments to support part-owned carriers, two of which are now insolvent, a person familiar with the matter said. The investors say they bought bonds issued by EA Partners between 2015 and 2016 after Etihad implied it would back the affiliates including struggling carriers Alitalia and Air Berlin, according to the person, who asked not to be identified because it’s private, Bloomberg News reported.

The World Bank halved Lebanon’s 2018 growth forecast to 1 percent, predicting its ratio of debt to gross domestic product would remain on an “unsustainable path,” Bloomberg News reported. The international lender cited a central bank decision to abruptly halt subsidized housing loans as a main factor behind the slowdown in economic activity this year. The real estate sector has provided “a rare source of growth impetus since 2012,” while production in most of the country’s other industries has fallen off, the World Bank said in its October report.

Lebanon’s finances have long resembled something out of Alice in Wonderland. Some investors are now wondering whether the house of cards is about to come crashing down in a messy sovereign default, the Financial Times reported. The backdrop is stark. The Mediterranean country’s government debt is equal to an eye-watering 153 per cent of its gross domestic product, the third-worst figure in the world after Japan and Greece.

Bahrain’s credit risk declined to the lowest level in five months on optimism the nation’s neighbors will soon come to the island-state’s rescue with an aid package, Bloomberg News reported. The cost of insuring Bahrain’s debt against default fell 34 basis points last week on relief that Saudi Arabia, the United Arab Emirates and Kuwait were said to be considering a $10 billion plan. The contracts closed at 307 basis points on Friday, the lowest since May and about half the level in June, when concern over the country’s finances spurred a sell-off of Bahraini assets.

Lebanon's worst bond market shock in a decade has raised doubts about whether the country's banks are willing and able to continue to bankroll the government, raising pressure on Beirut to step up reforms or risk a destabilising currency crisis, the International New York Times reported on a Reuters story. In September the cost of insuring Lebanese sovereign debt against default soared to its highest level since the global financial crisis of 2008, implying a more than 40 percent chance of default in the next five years.

It took almost 16 years to build Abraaj Group into one of the most influential emerging-market investors and the Middle East’s biggest private equity dealmaker, Bloomberg News reported. The Dubai-based firm’s dramatic collapse took just four months. Suitors are now circling the company’s funds as liquidators seek to settle about $1 billion in debt. The problems for the buyout firm and its founder, Arif Naqvi, began in February with allegations that money in the company’s health fund had been misused.

Saudi Arabia's first comprehensive bankruptcy law went into effect last month, one of many reforms to the legal system that economists say may be more important in the long run than high-profile privatizations, the International New York Times reported on a Reuters story. Crown Prince Mohammed bin Salman's Vision 2030 push to diversify the economy away from oil has grabbed attention for its big-ticket initiatives, such as a $500 billion business zone and a plan, now shelved, to sell part of the state oil firm.

Abraaj, once one of the most influential emerging-market investors, plans to vacate its headquarters in Dubai’s business hub after the embattled buyout firm failed to pay rent, people with the knowledge of the matter said. Dubai International Financial Centre told Abraaj to vacate its main office in the financial freezone by the end of the month, the people said, asking not to be identified as the information is private, Bloomberg News reported. The lease on one of the company’s offices has expired, one of the people said.