Dubai's Veiled Obligations

Dubai officials are in London and Frankfurt this week on the final leg of a global tour to persuade investors the sheikdom is through the worst. On offer are $6.5 billion of conventional and Islamic bonds to fill government coffers just before Dubai and its corporate proxies face $5 billion of debt repayments.

With $10 billion still available under the bailout program underwritten by the Abu Dhabi-based Central Bank of the United Arab Emirates, Dubai will avoid a default.

But the preliminary offering documents for the $4 billion euro medium term note and $2.5 billion Islamic bond, or sukuk, leave questions unanswered. The biggest is over Dubai's total borrowings. According to the documents, Dubai's direct debt is about $19 billion, considerably less than the $80 billion most analysts estimate is the minimum.