DW talks on solid ground as markets stay bullish

Dubai World's Chief Restructuring Officer Aidan Birkett met bankers yesterday as an announcement on restructuring the $26 billion (Dh95.5bn) of debt drew closer.

Birkett declined to comment on whether the final proposal for creditors was being drawn up in the meeting, but bankers, analysts, and most importantly, the markets – equities and debt – continued to be bullish about a quick and painless deal.

Ahmed Humaid Al Tayer, Chairman, Emirates NBD, speaking yesterday to reporters on the issue said initial negotiations looked for a painless solution for all and were very positive. According to Reuters, a Dubai World spokesman said: "Things look very positive."

Bankers in the know were quoted yesterday by media reports as saying they expected the initial negotiations and discussions to be solid, laying the ground for what would eventually be a conversion of short-term debt into long-term debt.

Meanwhile, the cost of insuring Dubai's debt against restructuring or default fell yesterday and Dubai World subsidiary Nakheel's 2011 Islamic bond rose (see graphic).

"The market has already largely priced in the positive scenarios on Dubai World restructuring," said Turker Hamzaoglu, Economist for Emerging Europe, Middle East and Africa at Bank of America-Merrill Lynch.

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