Dubai bonds hit record lows

9 December 2009

The value of bonds in Dubai's state-owned companies have hit record lows as investors show concern that more of the state's firms will follow Dubai World's lead in asking to restructure their debt payments.

Nakheel, Dubai World's property unit, has seen 11 per cent shaved off its Islamic bonds price in the past two days of trading, while DIFC Investments and Dubai Holdings Commercial plummeted as low as 44.5 cents on the dollar, reports Bloomberg.

Earlier in the week, Moody's Investor Service cut the credit ratings of six state-run companies operating in Dubai.

Barclays has reported it believes Dubai Holdings is most likely to be "next in line" to restructure its debt and the British bank predicted that companies operating in the country will now have their abilities to raise capital in global debt markets "severely impaired."

Last month, it was reported that UK construction companies are chasing $330 million in unpaid debts in the United Arab Emirates, with the majority of arrears related to projects carried out in Dubai.

By Gary Cooper

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