Abu Dhabi: Dubai will be able to meet all debt obligations due this year, including a $4 billion (Dh14.68 billion) loan owed by its investment fund, Reuters reported yesterday.
It quoted Ahmad Humaid Al Tayer, Governor of the Dubai International Financial Centre and a member of the Supreme Fiscal Committee, which was tasked with steering Dubai through its debt difficulties. He also said the emirate's economic outlook was "looking good" in 2011.
Dubai has about $30 billion of debt maturing over the next two years, with $12 billion of that coming due this year.
Market analysts welcomed Al Tayer's statement as being positive for investors. "The timing of the statement is very important. It comes at a time when credit rating agencies are saying they will possibly downgrade some of the region's economies," Mohammad Ali Yasin, chief investment officer at CAPM Investments, told Gulf News.
"It takes away any room for speculation and reassures the investor community that Dubai will be honouring its debt obligations for the year," Yasin added.
Chahir Hosni, Sales Manager at EFG-Hermes, said, "The market is already in recovery mode. This comment would give it a further boost."
UAE to lead bond issue
The UAE will dominate sovereign bond offerings among the six-member Gulf Cooperation Council this year as government sales in the region total $5 billion, Standard Chartered Plc said.
Abu Dhabi may sell $1.5 billion in debt in 2011 to create a long-dated benchmark, while Dubai also may issue $1.5 billion to fund its budget, the bank said in an e-mailed report yesterday. Outside the UAE, Qatar and Bahrain may sell $1 billion of securities each, the bank said. Abu Dhabi's government-owned companies will be the leading issuers of quasi-sovereign debt and may sell $8 billion to meet refinancing requirements.