Dubai’s $10bn bail-out loan from the central bank of the United Arab Emirates is sufficient to refinance debt and meet operational costs at government-related companies for the next year, an official said on Wednesday.
Nasser al-Shaikh, director-general of the department of finance, said Dubai would reveal details of the next $10bn tranche of its medium-term bond programme if it were launched at a later date, but he said the full $20bn would cover ”the worst case scenario” of Dubai’s ongoing requirements.
The federal cash, lent to Dubai on Sunday, will be used to retire debt and fund operational costs, primarily in the hard-hit real estate sector. Under an as-yet-to-be-defined mechanism, government-owned or related companies will borrow money priced more dearly than the 4 per cent at which the bonds were issued.
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