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Dubai seeks state-funded loan facility: Report

Dubai, November 19, 2008

Dubai is in talks with the United Arab Emirates federal government to create a state-funded loan facility to help firms access finance as international capital dries up, the Financial Times said on Wednesday.

The facility would be similar to the 120 billion-dirham ($32.67 billion) central bank liquidity injection in October aimed at reinvigorating interbank lending in the world's fifth largest oil exporter, the paper said, citing unidentified Dubai officials.

Speculation has mounted in recent weeks that Dubai government-linked companies will struggle to refinance its high-level of borrowing, forcing the emirate to sell off stakes in some of its prize assets.

Dubai does not publish official figures on its debt but Fitch Ratings said earlier this month that government-owned entities owe about $70 billion in foreign-currency bonds and debt. Moody's has said Dubai owed at least $47 billion in debt, more than its gross domestic product.

According to Reuters data, Dubai will need to address more than $10 billion in maturing bonds and loans by the end of the first half of 2009. The first tests will be a $1.725 billion loan for Dubai Drydocks, which matures in January and more than $3 billion for Borse Borse Dubai, the holding company for the emirate's two exchanges, which matures in February.

The FT said the facility could be established as early as next week.

The emirate has set up a high-level committee to look at how to deal with the financial crisis and has said it will introduce measures to restore confidence in the property sector.-Reuters




Tags: UAE | Dubai | loan facility |

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