Banks begin to sell Dubai World loans

Banks have conducted the first sales of loans they made to Dubai World, crystallising losses of nearly half the face value of the debt.

The move also makes it more likely that Dubai World will use a special law and tribunal set up to aid the conglomerate’s $23.5bn debt restructuring in an effort to avoid any potential for the new debtholders to block a deal the company is hammering out with its banks, according to people close to the talks.

A group of international banks, which hold as much as 60 per cent of the government-owned conglomerate’s senior-ranking loans, are in talks with the company to finalise the terms for a restructuring that would see debt repayments extended.