Dubai faces a "pivotal year" in 2014 as the emirate tackles $20 billion of debt amid an unclear legal framework for restructurings and uncertain supp (more)
faces a "pivotal year" in 2014 as the emirate tackles $20 billion of debt amid an unclear legal framework for restructurings and uncertain support from its richer neighbor, Moody's Investors Service said.
"Little progress has been made on clarifying and strengthening the legal framework for insolvencies/debt restructuring, while details of the Dubai government's capacity to support its government-related institutions remain uncertain," Moody's said in a report titled "Dubai Corporates: Modest Economic Growth Benefits Corporate Credit Quality, But 2014 Debt Wall Looms." Next year "will be a pivotal year for Dubai as $20 billion of direct government debt related to Dubai World becomes due," it said.
Dubai, which was on the brink of default in 2009 after a spending binge to turn itself into a trade and tourism hub, has about $17 billion of bonds and loans maturing in 2013 and 2014, according to data compiled by Bloomberg. Dubai's neighbor Abu Dhabi and its banks probably won't provide direct support to the city next year after the United Arab Emirates capital and the central bank rescued Dubai from the crash with a $20 billion dollar lifeline, according to Moody's. Budget Rationalization
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