Dubai bond risk declined to the lowest this year on improving prospects that state-owned companies will get loans to refinance debt.
The cost of protecting against a default by the Dubai government fell to 650 basis points today from 669 on March 20, CMA Datavision prices show. The cost had surged to 1,000 basis points last month on concern Dubai will struggle to refinance its debt.
“Spreads on Dubai debt will come down further,” said Mohieddine Kronfol, managing director at Dubai-based Algebra Capital Ltd. “People are getting more comfortable with Dubai’s fundamentals. Also, some of the steps which the government has taken to ease the economic crisis have begun to work.”
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