Dubai World Likely to Offer ‘Sweeteners’ to Creditors, UBS Says

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Dubai World, the state-owned company seeking to renegotiate about $22 billion of debt, is more likely to offer improved terms to creditors than risk the possibility of legal claims, UBS AG said.

“There is a higher probability of Dubai World offering sweeteners to creditors, perhaps higher interest rates or equity swap options, for a terming-out of obligations in lieu of creditors waiving legal claims to key Dubai World assets including DP World,” UBS AG analysts said in a report today.

Dubai World, one of Dubai’s three main state-owned business groups, said on Nov. 25 that it would seek to delay repaying debt for at least six months, roiling markets in the Middle East and around the world. The company plans to meet with creditor banks this week to complete a standstill agreement, a banker participating in the talks said on Jan. 14.