Dubai’s default risk fell to the lowest level since Dubai World roiled global markets with a debt restructuring in 2009, as Emirates airline sold bonds and local entities reach debt accords.
The cost of protecting Dubai’s debt against default dropped to 322 basis points today, according to data provider CMA at 10:30 a.m. in London. The five-year credit default swaps surged from 325 basis points on Nov. 24, 2009 to 655 three days later after Dubai World announced plans to restructure about $25 billion of debt.
Emirates, the world’s biggest airline by international traffic, sold $1 billion of five-year bonds yesterday, yielding 330 basis points over the benchmark mid-swap rate. State-owned Dubai World reached a final agreement with its lenders in March, while Dubai Holding LLC and property developer Nakheel PJSC are in talks with creditors to restructure a total of about $20 billion.
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