Don’t assume that the economic comeback means Dubai is out of the woods. Holders of its debt may be in trouble, unless the Emirate can raise more money.
DUBAI, United Arab Emirates (AP) — An analyst at credit rating firm Standard & Poor’s says Dubai has “insufficient” funds to pay back billions of dollars worth of debt coming due, putting added pressure on the city-state to raise additional cash.
Farouk Soussa, S&P’s head of Middle East government ratings, said Sunday that the sheikdom has about $4 billion left from a February bond issue, but must find a way to cover as much as $50 billion over the next three years.
He says “the notion that the government will be able and/or willing to stand 100 per cent by all that debt on an equal basis is wrong.”
Soussa’s comments come two days after a top Dubai official told CNN the government could seek to raise another $10 billion through government bonds as early as this month.