Dubai CDS jump to 627 bps; highest since Nov 2009-CMA

* username: rupertbu

Dubai's debt insurance costs jumped on Friday, with five year credit default swaps rising above 600 basis points for the first time since November 2009, CMA DataVision said.

BONDS

The CDS were quoted at 627 bps by 1345 GMT, a rise of 43 bps since Thursday's close. This means it costs over $600,000 to insure $10 million of Dubai sovereign risk for a five-year period.

Dubai CDS have been steadily rising since the end of January and are up more than 130 bps this month.

Dubai shocked world markets last November when it asked creditors for a multi-billion dollar standstill on the debt owed by subsidiaries of state-run conglomerate Dubai World.

"Basically it is a continuation of the Dubai World saga. They are yet to come out with any restructuring plan so people are starting to get worried," said Elisabeth Gruie, emerging debt strategist at BNP Paribas.

She said the postponement of several corporate bond issues this week was impacting sentiment on Dubai, seen as vulnerable to the downturn in global sentiment.

"There is a bit of a liquidity crunch in the making so that's reflecting on the Dubai sovereign," Gruie said.END