Dubai World might try low repayment offer

* username: rupertbu

The cost of insuring Dubai’s debt rose to its highest level in almost a year yesterday after news that Dubai World was considering offering its creditors 60 per cent of their money back, with repayments delayed until 2017.

The state-owned Gulf company’s international banking creditors said that it was unlikely that such an offer would materialise, adding that it was “miles away” from anything that would be acceptable to the lenders’ syndicate. “They could be trying to pre-market this, but we don’t think it will happen,” one well-placed person said.

The London-listed shares of Royal Bank of Scotland, HSBC and Standard Chartered, which are among Dubai World’s biggest creditors, all rose yesterday, indicating that the stock market was not pricing in big Dubairelated debt write-offs.