Monday, 6 May 2013

Dubai repaid $910 million debt in April

ZAWYA DOW JONES

DUBAI

DUBAI has repaid debt worth 3.34 billion dirhams ($910.4 million) that came due in April, the emirate’s government said on Sunday.

The redeemed bonds were issued under its AED15 billion medium-term note program in April 2008, the Dubai government’s media office said in an emailed statement.

“This repayment reaffirms Dubai Government’s commitment to deal with its repayment obligations in a proactive manner. It also strengthens the government’s resolve to honour all its financial obligations on time,” Abdulrahman Al Saleh, director general of Dubai’s department of finance, said in the statement.

Dubai and its flagship companies racked up billions of dollars in debt to help finance some mega projects announced during the boom years, but struggled to meet its obligations in the aftermath of the global financial crisis in 2008.

The emirate’s economy is charting a recovery now, boosted by stronger trade and tourism. There are also signs of a revival in its property market as Dubai benefits from its safe haven status amid political unrest elsewhere in the region.

Billions of dollars in debt due next year will however be a real test for Dubai’s ability to service its obligations, some analysts say.

Moody’s Investors Service in March noted that Dubai may not have the financial resources to repay $20 billion of debt due in 2014 and will need to push forward the maturity of the borrowings.

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