United Arab Emirates

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.

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.

New caps on mortgage lending will soon come into force in the United Arab Emirates, part of a long-running effort by the country’s central bank to keep real estate markets in check and avoid a debt-fueled bubble. And not everybody’s happy, The Wall Street Journal Middle East Real Time blog reported. While the limits apply to all of the U.A.E.’s banks, they’re seen as largely aimed at Dubai, where a recent Standard Chartered report estimated apartment prices went up by about 38% year-on-year in October.

Citigroup and International Bank of Qatar are holding up negotiations to restructure $4.5 billion in debt of Abu Dhabi conglomerate Al Jaber Group, further complicating drawn-out talks, sources said, Gulf Daily News reported. Al Jaber is one of the most prominent private sector firms in Abu Dhabi, which has generally suffered fewer corporate problems than neighbouring Dubai since the financial crisis. With operations in construction, aviation and retail, Al Jaber set up a five-bank creditor committee in 2011 to negotiate a restructuring.

Banks in the United Arab Emirates are seeking five years to comply with a central bank regulation to limit their exposure to government entities in the second-biggest Arab economy, Bloomberg News reported yesterday. The banks are also seeking to exclude marketable bonds and sukuks from the proposal, according to the U.A.E. Banks Federation. The central bank said in April 2012 that banks must not lend more than 100 percent of their capital to local governments and the same amount to government-related entities to help reduce risk, and must comply with the new regulations by Sept. 30, 2012.

Dubai, which teetered on the brink of default in 2009, is accelerating asset sales as more than $30 billion of debt repayments come due next year, Bloomberg reported. Dubai Financial Group yesterday agreed to sell its stake in consumer lender Dubai First to First Gulf Bank PJSC for 601 million dirhams ($163 million). Dubai Holding LLC plans to sell its 35 percent stake in Tunisie Telecom, the country’s ministry for information and communication technologies, said June 21.

Dubai Group, an investment company owned by Dubai's ruler, has agreed to a $10 billion debt restructuring with its main bank creditors after three years of talks, potentially lifting a cloud of uncertainty that has engulfed the emirate since the financial crisis, The Wall Street Journal reported. If it goes through as expected, the restructuring will be a major step in the broader reorganization of Dubai's government companies in the wake of the financial crisis, analysts say.

The inadequacy of off-plan sales was supposed to be one of the lessons developers and regulators learned from the crisis, which sent real estate prices tumbling by more than half in some parts of Dubai. Such sales were problematic because customers paid up before projects were built. When the market turned sour and developers slowed down or scaled back, many investors had trouble getting their money back, The Wall Street Journal Middle East Real Time blog reported.