Before Greece hogged the headlines, the big sovereign debt crisis story was Dubai. Six months ago one of the emirate’s leading investment companies, Dubai World, shocked the markets by announcing that it would seek to restructure $23.5 billion of debt. Last month, agreement on that restructuring was reached with a majority of Dubai World’s creditors.
The big news is that non-government creditors will receive 100% of their claims via new debt tranches. Dubai World will issue two new bonds, one a five-year note for $4.4 billion; the other an eight-year loan for $10 billion. In addition, the government will inject $1.5 billion into Dubai World and convert $8.9 billion of debt owed to it into equity,...
