Dubai Needs Bonds to Pay $6.8 Billion Debt, Deutsche Bank Says

Dubai, the United Arab Emirates’ sheikdom most severely hurt by the credit crunch, may be dependent on the second part of a bond offering to meet debt obligations of $6.8 billion next quarter, Deutsche Bank AG said.

“For Dubai, the peak of the redemption profile is in the fourth quarter with $6.8 billion due,” Caroline Grady, a London-based economist for the bank, wrote in a note to clients received by Bloomberg today. “Assuming the second $10 billion government of Dubai bond is issued in the coming months, we don’t see any issues with Dubai’s ability to pay.”

Rating firms have downgraded Dubai state-owned companies on concern the emirate may not have sufficient funds to support its struggling entities after the credit crisis ended a four-year real-estate boom in Dubai and forced the U.A.E. government to bail out the two biggest mortgage lenders.

Listing of Dubai Debt