News that Dubai will not back up government owned Dubai World will have contagion effects for Abu Dhabi , Moody's said.
"The contagion effect for Abu Dhabi will be unavoidable, as doubts will be raised as to how Dubai is going to finance its growth," Moody's analysts said in a weekly note.
"The form of the proposed debt restructuring could increase the likelihood of downgrades of bank financial strength ratings (BFSRs) for the (UAE) banks that are already on review."
Moody's said the potential default of quasi-sovereign Dubai World "changes long-held market assumptions regarding implicit government support of local credits".
Moody's rates the UAE and Abu Dhabi at Aa2. It does not rate Dubai.
A Dubai leader spoke at the November World Economic Forum meeting in his shining city on the gulf. He praised participants for handling their "prosperity." Three days later Dubai World postponed debt payments.
ReplyDeleteOverall, the talk was globalist.
http://peureport.blogspot.com/2009/11/world-economic-forum-met-in-dubai.html
Bonds fail in Dubai, New York real estate goes up for sale:
ReplyDeletehttp://www.globest.com/news/1547_1547/newyork/182397-1.html
The Dubai effect...