Dubai Holding, the conglomerate owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, today said it had repaid a US$250 million (Dh918.2m) loan to BNP Paribas on its maturity date. The repayment comes a week after Dubai Holding said it had paid off a $300m loan of its property subsidiary, Sama Dubai. Investors are closely watching how Dubai deals with major debts in order to evaluate the emirate's economic health. Dubai and related entities are dealing with an estimated $85 billion of debt.
The UAE has refinanced about two-thirds of its $27.7bn of Eurobond and syndicated loan redemptions, according to a report from Deutsche Bank this month. Dubai accounted for $19.3bn of the obligations, while Abu Dhabi accounted for about $8.1bn, the report said. Still, Dubai has heavy obligations going forward, with an average annual redemption requirement of $12.5bn from next year to 2014, the report said.
Caroline Grady, an economist at Deutsche Bank, wrote that Nakheel's $3.5bn Islamic bond due on December 14 was "seen as the litmus test of sovereign creditworthiness". @Email:firstname.lastname@example.org