_extreme
02-04-2009, 11:26 PM
Well isn't this a surprise...:mad:
DUBAI -- This city-state's department of finance said Thursday evening it had appointed Rothschild, the investment bank, to advise the government on its recently announced $20-billion bond program.
The government, in a release, said the bank would help it establish a "financial support fund," to be wholly owned by the government and funded by proceeds from a new debt-issuance program. The program, announced in February, is aimed at refinancing Dubai's large international debt load and pumping some of the city's state-owned companies with liquidity to pay their bills.
Dubai has been particularly hard hit by the current economic downturn. Its crucial real-estate sector has crashed down to earth amid fleeing investors and tight local credit. The emirate, one of seven that make up the United Arab Emirates, doesn't have the oil resources that many of its Mideast neighbors enjoy. It financed its explosive growth over the last few years with significant overseas borrowing.
This year, a good portion of that debt comes due, just as tight international credit markets have made new borrowing difficult. Meanwhile, some of Dubai's biggest economic mainstays -- tourism, trade, finance and real-estate -- have all been hit by global headwinds.
In February, Dubai said it would issue $20 billion worth of bonds to refinance some of its borrowing. It said a first tranche of $10 billion had been fully subscribed by the federal government of the United Arab Emirates, essentially a federal bailout for the city-state.
But the mechanism for disbursing that new cash hasn't yet been disclosed. On Thursday, Dubai, in a release, said only that its new fund "will provide targeted financial support and liquidity to certain state-affiliated entities across the Dubai economy while facilitating the reforms necessary to protect stakeholder value and the long-term viability of these entities."
Zawya Dow Jones reported earlier in the week that Rothschild had been one of two institutions shortlisted for the mandate.
Link : http://online.wsj.com/article/SB123869453679183157.html
DUBAI -- This city-state's department of finance said Thursday evening it had appointed Rothschild, the investment bank, to advise the government on its recently announced $20-billion bond program.
The government, in a release, said the bank would help it establish a "financial support fund," to be wholly owned by the government and funded by proceeds from a new debt-issuance program. The program, announced in February, is aimed at refinancing Dubai's large international debt load and pumping some of the city's state-owned companies with liquidity to pay their bills.
Dubai has been particularly hard hit by the current economic downturn. Its crucial real-estate sector has crashed down to earth amid fleeing investors and tight local credit. The emirate, one of seven that make up the United Arab Emirates, doesn't have the oil resources that many of its Mideast neighbors enjoy. It financed its explosive growth over the last few years with significant overseas borrowing.
This year, a good portion of that debt comes due, just as tight international credit markets have made new borrowing difficult. Meanwhile, some of Dubai's biggest economic mainstays -- tourism, trade, finance and real-estate -- have all been hit by global headwinds.
In February, Dubai said it would issue $20 billion worth of bonds to refinance some of its borrowing. It said a first tranche of $10 billion had been fully subscribed by the federal government of the United Arab Emirates, essentially a federal bailout for the city-state.
But the mechanism for disbursing that new cash hasn't yet been disclosed. On Thursday, Dubai, in a release, said only that its new fund "will provide targeted financial support and liquidity to certain state-affiliated entities across the Dubai economy while facilitating the reforms necessary to protect stakeholder value and the long-term viability of these entities."
Zawya Dow Jones reported earlier in the week that Rothschild had been one of two institutions shortlisted for the mandate.
Link : http://online.wsj.com/article/SB123869453679183157.html