Dubai Inc is well on the way to completing $34bn in debt restructuring triggered by the 2009 financial crisis thanks largely to a policy of “bail out bondholders, burn the banks”, says Exotix, the investment broker.
Honouring bond investors’ claims has helped restore Dubai’s creditworthiness and allowed its government-related enterprises (GREs) to return to the capital markets. However, there aren’t many other governments that could follow Dubai’s example in forcing the bulk of the restructuring onto the banks, both local and international.
According to Exotix, Dubai has completed six bank debt restructurings totalling $21.9bn out of 11 totalling $34bn. The completed deals involve DHCDG ($555m) , Dubai World ($14.7bn), Dubai Aerospace ($800m), Nakheel ($2.2bn), Dubai Holding ($1.2bn), and Dubai International Capital ($2.5bn).
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