I thought even the loan sharks have disappeared this global credit squeeze. When Reuters first reported on the 18th that Borse Dubai succeeded at rolling over $2.5b of debt, I sat up and started monitoring.
Khaleej Times was I believe the first local paper to pick this up. Gulf News and the Abu Dhabi National were still silent. National eventually published a fuller story of the financial coup yesterday but not before a Business 24/7 article was written in such a way to raise as many questions as it answered. You know, quoting "unamed sources", "declined to be identified" sort of thing.
Dubai government paid down $900m of the debt of $3.4b falling due end of this month, but where did they get the financing for the remaining $2.5b?
The WSJ just came in with this. It is short, so I am reproducing it here.
DUBAI -- This city-state paid down and refinanced a loan due this month, easing worry about its ability to service its debt.
Borse Dubai said Thursday that it refinanced $2.5 billion of a $3.8 billion loan that it took out last year to buy a 20% stake in Nasdaq OMX Group Inc. International banks put $1.2 billion in the new facility and Dubai banks provided $1.3 billion, according to a banker involved in the deal.
Dubai government entities provided $900 million to help pay off the loan, and Borse Dubai saved $400 million in foreign-exchange fluctuations, according to an official at the holding company.
Two questions,
1. Where did the banks get the money, which will lead us to
2. Can we expect similar coups going forward, and what did the banks see in Dubai that was not privy to the investing public?
Beyond the price, what about the terms of this loan?
Further info at
Khaleej Times: http://www.khaleejtimes.com/DisplayArticleNew.asp?section=business&xfile=data/business/2009/february/business_february894.xml
Business 24/7 Today: http://www.business24-7.ae/articles/2009/2/pages/02192009_a8741344f676473cbe7f1731114d4144.aspx
The National: http://www.thenational.ae/article/20090219/BUSINESS/150814564/1137
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