Foreign creditors of Dubai’s indebted government companies are looking to sell their loans at a loss – but few transactions have taken place because of the hefty discounts potential buyers are demanding.
Only one sale, involving a US$25 million (Dh91.82m) loan to Dubai World that is part of a $5.5 billion credit facility, has been completed so far, according to a credit trader in London familiar with the transaction. That loan sale by an Asian bank this year came at 55 per cent of its face value.
Many other banks, mainly international and regional institutions, are looking to offload loans they made to Dubai World and Dubai Holding, two of the emirate’s three business conglomerates, locking in losses and letting hedge funds that are comfortable with high-risk debt take over the exposures."
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