Dubai, which was on the brink of a default in 2009, may “muddle” through a financing strategy next year as state-linked companies sell assets and refinance debt, Bank of America Merrill Lynch said.
“A perilous exercise of identifying fiscal deficit financing sources may be showing that a mix of domestic banking sector and Abu Dhabi support helped Dubai muddle through so far, and this (opaque) strategy could continue into 2012,” London- based analyst Jean-Michel Saliba wrote in a report today.
Dubai’s government yesterday denied a report that it plans to restructure debt of state-owned companies next year and said it was ready to support them through “various options.” State- owned Dubai Holding Commercial Operations Group LLC, Jebel Ali Free Zone FZE and DIFC Investments LLC, which have a combined $3.8 billion of debt maturing next year, are all facing refinancing risks and may experience “ratings volatility” as they move closer to the maturity dates, Moody’s Investors Service said Dec. 6.
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