Dubai Bonds to Rally as Default Risk Wanes, Deutsche Bank Says - BusinessWeek

Dubai sovereign and corporate bonds will extend gains over the next six months as the risk of a default by the emirate wanes, according to Deutsche Bank AG.

Germany’s biggest bank recommends investors buy Dubai Holding Commercial Operations Group LLC’s 6 percent notes maturing in February 2017 and dollar bonds sold by DP World Ltd., said Jamil Hallak, head of credit trading for the Middle East and North Africa at Frankfurt-based Deutsche Bank. Dubai World, the state-owned holding company, said on May 20 it reached an agreement with a group of creditors to restructure $23.5 billion of liabilities.

“Dubai bonds offer value especially after the Dubai World debt restructuring, which has provided investors with more confidence and removed a default scenario,” Hallak said in an interview in Dubai. “I see potential for their outperformance.”