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International Monetary Fund estimated that the emirate of Dubai faced $30 billion in maturities this year. That is reportedly equal to a third of its annual economy. But — an agreement was reached last March allowing the sheikdom to refinance $20 billion at 1% fixed interest, a quarter of the original cost, for five more years. And, the term is renewable. Wow!
A $10 billion bond extended by the UAE central bank plus a $10 billion loan from the oil-rich neighboring emirate of Abu Dhabi helped Dubai state-controlled companies to weather the global financial crisis in 2008.
The rationale to refinance? Dubai’s domestic economy expanded 4.9% in 2013 and witnessed a double-digit upturn in apartment and villa sales. Improved credit worthiness theoretically boosts the entire country’s competitiveness both regionally and internationally.
Pick up the book STAYING AFLOAT – Three Years in Abu Dhabi and enjoy a colorful tale of my experience as an American expat while working and living in wealthy Abu Dhabi. Available via Amazon.