Dubai World Seeks Debt Delay, Owes $59 Billion; Default Swaps Soar .... SCHADENFREUDE....

I have to repeat myself More Bad News For Dubai ...... I think after you have finished reading the follwing post & watching the clips it should be clear that the $ 60 - $ 80 billion from Dubai itself is only a fraction of all the bad loans sitting mainly on the regional bank balance sheets ( probably no coincidence that the supervisor aka regional lender of last resort gave some "prudent" accounting advice back in January > How Not To Restore Confidence....."United Arab Emirates Edition" ) .......

Muß mich da wohl erneut wiederholen More Bad News For Dubai ...... Ich denke das jeder der das folgende Posting gelesen und sich die Videos angeshen hat mit mir übereinstimmt das die jetzt im Raum stehenden bis zu 80 Mrd $ die Dubai selbst im Feuer stehen hat nur einen kleinen Teils der Summen ausmachen die ansonsten noch in den wohl überwiegend regionalen Bankenbilanzen ( obwohl man ja unsere Landesbanken nie unterschätzen sollte...;-) schlummern ( sicher kein Zufall das die Aufsicht bereits im Januar dazu aufgerufen hat sich bei der Bilanzierung "verantwortungsvoll" zu verhalten... > How Not To Restore Confidence....."United Arab Emirates Edition" ).....



Dubai World Seeks Debt Delay as Abu Dhabi Provides $5 Billion

Nov. 25 (Bloomberg) -- Dubai World, the government-owned holding company struggling with $59 billion of liabilities, is seeking to delay repayment on all of its debt, even after Abu Dhabi banks provided $5 billion for Dubai’s support fund.

Dubai World will ask all creditors for a “standstill agreement” as it negotiates to extend the maturities of its debt, including $3.52 billion of Islamic bonds due for repayment on Dec. 14 by its property unit Nakheel PJSC, the builder of Dubai’s palm tree-shaped islands, the company said in an e- mailed statement today.

The emirate, home to the world’s tallest tower and the biggest man-made islands, owes $4.3 billion next month and another $4.9 billion in the first quarter of 2010 through government and corporate debt, Deutsche Bank AG data show. Abu Dhabi government-controlled banks, National Bank of Abu Dhabi PJSC and Islamic lender Al Hilal Bank, bought all $5 billion of bonds from the government, Dubai’s Department of Finance said in an e-mailed statement today.

To understand how hyperinflated things are you should take a look at The Upcoming Skyscraper Tsunami & watch at least one of the YOUTUBE clips at the end of the post..........

Um zu verstehen wie größenwahnsinnig die Lage in Dubai ist empfehle ich dringend einen Blick auf The Upcoming Skyscraper Tsunami & zumindest auf einen der YOUTUBE Clips am Ende des Postings zu werfen.....

Dubai, the second biggest of seven sheikhdoms that make up the United Arab Emirates, set up a $20 billion Dubai Financial Support Fund after the credit crisis triggered the world’s worst property crash and hurt its finance and tourism industries. The emirate raised $10 billion by selling bonds to the U.A.E. central bank in February, with some of the money going to property developers.

What a difference a year makes ( see No Kidding.... Dubai May Need Help To Repay Debt....

Welch Unterschied doch ein Jahr ausmachen kann ( siehe No Kidding.... Dubai May Need Help To Repay Debt....

‘Shut Up’

Dubai ruler Sheikh Mohammed Bin Rashid Al-Maktoum said Nov. 9 the emirate’s bond program to raise a further $10 billion will be “well received,” and those who doubt the unity of Dubai and Abu Dhabi should “shut up.” Abu Dhabi, the U.A.E.’s capital, is owner of the world’s biggest sovereign wealth fund and holds almost all of its oil.

Home prices in Dubai plummeted 47 percent in the second quarter from a year ago, the steepest drop of any market, according to Knight Frank LLC. Property prices may drop further, a survey by Colliers International showed Oct. 14.

Let´s hope the following handsome "gesture" will be enough to please the new overlord.....;-)

Bleibt zu hoffen das die nachfolgende Geste genug sein wird um die neuen Herren im Hause zu weiteren Mrd. zu bewegen.... ;-)

Dubai Autonomy Fades as Crisis Strengthens Abu Dhabi

Nov. 24 (Bloomberg) -- Until last month, a billboard at one of Dubai’s busiest roundabouts featured one photo, of Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum. The new billboard says “Long live our Emirates union” and also shows United Arab Emirates President Sheikh Khalifa Bin Zayed Al Nahyan.

“For the general purposes of the Dubai Financial Support Fund…” FT Alphaville

As FT Alphaville noted the market was on Wednesday digesting news that the $5bn Dubai had raised from two Abu Dhabi government-controlled banks would not go to paying off Nakheel convert bond holders as expected. Instead the proceeds would go towards the general purposes of the Dubai Financial Support Fund (DFSF).

The likes of Barclays Capital, meanwhile, estimate the liabilities could be as much as $72bn, a figure that runs significantly beyond Dubai’s own ability to refinance without support from Abu Dhabi.

In other words, there’s no telling how big the total hole Dubai has to plug is, much less its strategy for doing so, and more importantly how Dubai World bond holders — the government-owned group which owns Nakheel — rank in the fund’s priorities.

On the latter, the indication from today’s news is that they don’t rank highly at all.

CDS report: All eyes on Dubai World FT Alphaville

The Dubai Government announced that it is restructuring Dubai World, an Investment company owned by the government, with immediate effect. It has asked creditors for a six-month standstill on its obligations until at least 30 May 2010.

Spreads throughout the region widened on the shock news. More
volatility can be expected as investors await details of the restructuring

LEX / FT

Dubai’s hopes of becoming a world financial centre are proving to be nothing more than an Ozymandian dream. Wednesday’s unexpected decision by Dubai World, the Gulf emirate’s largest state-owned conglomerate, to impose a six-month debt standstill has foreign creditors up in arms. Earlier this month, Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum publicly pledged his support for the group and its obligations. Investors, perhaps foolishly, took him at his word.

The consequences of the standstill, and possible eventual default, are far-ranging. The repayment of Dubai World’s $4bn Nakheel bond was seen as a litmus test for the emirate’s ability to deal with the $80bn owed by the sovereign and its state-controlled companies. The emirate’s willingness to do this is now in doubt, especially as only an hour earlier it raised $5bn from two state-controlled banks in Abu Dhabi. This was only half what had been expected, but followed $10bn of earlier support from the kingdom’s richer neighbour.

Foreign creditors are muttering darkly about taking legal action.

You really cannot make this up..... No Bailout, lets sue them.....

Den Satz muß man sich mehrmals durchlesen... Erst dann wird deutlich in welcher Welt die Bankster in erster Linie wegen der andauernden Hilfe durch den Steuerzahler noch immer leben.....

Dubai shock after debt standstill call FT

Standard & Poor’s and Moody’s Investors Service immediately downgraded the ratings of all six government-related issuers in Dubai following news of the repayment delay and left them on review for possible further downgrade.Moody’s cut ratings on some government-related entities to junk status, while S&P cut ratings on some entities to one level above junk.

UBS: support for Dubai may be less than assumed MW

Analysts at UBS said authorities will not have taken the decision to restructure Dubai World lightly and that there are three potential explanations for the decision. Firstly, UBS said, Abu Dhabi's support for Dubai might be less generous than assumed. "Perhaps Abu Dhabi has forced Dubai to tackle the problem of excessive corporate debt 'in-house' first before extending more financial support," the broker said.

A second possibility is that corporate-sector problems might be more severe than assumed, UBS said.

Thirdly, Dubai's debt might be higher than the generally assumed $80 billion to $90 billion due to potential off-balance sheet liabilities, it added

Just in time.....

NYT

CSI Dubai FT Alphaville



Some Dubai World Unit Creditors Form Group WSJ

Among options bondholders are exploring is the possibility of seizing Dubai land that is being used to secure the bonds. But Julian Lim, a London-based bond analyst at Nomura, says there are question marks over the value of the land backing the bonds. In addition, it is unclear whether bondholders would even be able to seize the property given that local courts may consider those assets sovereign entities of Dubai, he added.

Detailed Debt & Maturity Profile Dubai, Abu Dhabi & UAE ZH

A Financial Mirage in the Desert NYT

Quantifying External UAE And Dubai Loss Exposure ZH

"Kreditgetriebene Fata Morgana" Querschüsse

Dubai's dramatic boom over the last decade in pictures Telegraph

FACTBOX - What assets Dubai could be forced to sell Reuters

Total Eclipse At The Heart Of Dubai’s World Edward Hugh

The question is, of course, now that the emirate’s lop sided growth model has been shown to be completely dysfunctional, what are the viable long term business prospects in a city with so much excess capacity as far as property goes. According to the Dubai Statistics Center, the total population was 1,422,000 as of 2006, of which 1,073,000 were male and only 349,000 were females.

Evidently activity associated with the construction industry can offer some part of the explanation for this massive gender imbalance. Just under 20% of the population are estimated to be UAE nationals. Approximately 85% of the expatriate population (and 71% of the emirate’s total population) is thought to be Asian, chiefly Indian (51%), Pakistani (15%), Bangladeshi (10%). This impression of a large construction industry oriented population is reinforced by the economic data

Real estate and construction account for about 23% of GDP and financial services for another 11%.

Dubai Cartoon Telegraph :-)

Dubai Bubble Burst Youtube

Die Finanzkrise erreicht Dubai Youtube ( German/Deutsch)

Geschichte von Dubai / UAE ARTE via Youtube

Dubai Real Estate CrashYoutube

DUBAI = LAS VEGAS/SILICON VALLEY ON STEROIDS!

More Bad News For Dubai ......

Time for another update from Dubai...... Compared to The Upcoming Skyscraper Tsunami the rotten performance of their SWF is only a minor problem...... But it seems that almost everything Dubai pushed forward during the past few years is running into trouble...... Clearly a poster child for the bubble years......

Es ist mal wieder Zeit für ein Update aus dem vermeintlichen Wunderland Dubai....... Sieht so als fast alles was die dort anfassen wirklich nur auf Sand gebaut ist...... Verglichen mit dem Upcoming Skyscraper Tsunami ist die lausige Performance des SWF wohl aber nur ein winziges Problem...... Dubai ist sicher das Paradebeispiel für die Bubble Jahre. Was hier an Gigantismuß in den Wüstensand bzw. auf künstlichen Inseln versenkt worden sprengt wirklich jeden Rahmen......
Istithmar Said to Halt Investment; Dubai Weighs Sale (Bloomberg)

Istithmar World, the Dubai sovereign wealth fund, is halting investments as part of a restructuring effort after spending more than $25 billion this decade on stakes ranging from a yacht marina to luxury retailer Barneys New York, according to people familiar with the plan.

> I just couldn´t resist.... via Istithmar World

> Konnte hier einfach nicht widerstehen.... via Istithmar World

Retail Deal of the Year for 2007 for acquisition of Barneys New York (2007) Investment Dealers Digest

Istithmar World Capital Announces Additional Capital Support For Barneys New York 2009

"Istithmar World Capital has provided a significant level of additional capital to support Barneys New York. Working closely with management, we believe that this amount allows the company financial flexibility to work with the company's major vendors and financial intermediaries.

> With deals like this no wonder Istithmar has won several awards..... ;-)

> Dank solch gelungener Deals ist es kein Wunder das Istithmar mit Preisen überhäuft worden ist.... ;-)

Best Private Equity House (2008) Banker Middle East

Best Private Equity House Award (2007) Banker Middle East

> Surprising to see that the WHITE ELEFANT MGM City Center in Vegas didn´t win a special award..... Update: Video City Center

> Fast überraschend zu sehen das die wohl größte Fehlleistung das MGM City Center in Vegas nicht auch noch einen Sonderpreis abgeräumt hat..... Update: Video City Center

> Back to Bloomberg....

The process may result in a sale of the fund or its assets, they said. Istithmar, run by David Jackson, said this week that co-chief investment officers John Amato and Felix Herlihy would leave the firm. Jackson’s job is under review, the people said.

A restructuring by Istithmar and its parent Dubai World may mark the most public reversal of fortune for a state-controlled investment firm since global credit markets seized up in 2007.

Sovereign wealth funds, fueled in part by oil revenue, have become sources of capital around the world for companies, including Citigroup Inc. and Morgan Stanley.

Istithmar and Dubai World have struggled this year on investments, including Barneys, which may be facing a restructuring or bankruptcy, according to people familiar with the retailer, and CityCenter, an $11 billion project in Las Vegas.

Abu Dhabi, the wealthiest member of the United Arab Emirates, provided a $10 billion bailout this year for Dubai as the emirate struggled to meet payments on $80 billion of debt used to finance real-estate projects. ....

> Won´t be the last time Abu Dhabi will be bailing out Dubai........ What a mess....

> Abu Dhabi darf sich jetzt schon einmal freuen das hier demnächst in regelmäßigen Abständen Bailouts fällig werden.... Sieht immer mehr so aus als wenn hinter den glitzernden Fassaden nur heisse Luft steckt.... Ein gewisses Maß an Schadenfreude kann ich mir da nicht verkneifen.....

UPDATE: Dubai’s Trail of Dud Deals Shows Sovereign Wealth Gone Awry

Dubai investment firm Istithmar World may be the first sovereign wealth fund to liquidate after a $27 billion spending spree financed largely with borrowed money, people briefed on the matter said.

Unlike government-controlled funds in Kuwait and Abu Dhabi, flush with cash from oil production, or in China, backed by export earnings, Istithmar fueled purchases such as the takeover of Barneys New York by borrowing as much as 90 percent of the money, the people said.

Istithmar’s parent, Dubai World, tapped Middle Eastern and European banks including Barclays Plc, Royal Bank of Scotland Group Plc and Deutsche Bank AG, leaving those three with combined debt holdings of at least $1.5 billion, the people said.

“Dubai sovereign wealth funds are leveraged like private equity funds"

Istithmar contributed about $2.5 billion of its own cash to back $27 billion of purchases since 2003, the people said, speaking anonymously because the strategy was private. It used so-called non-recourse bank loans, backed by specific assets, to finance about 75 percent of its acquisitions, one of the people said.

Dubai World is in talks with its creditor banks to restructure at least $12 billion in debt, a person close to the talks said, speaking anonymously because the negotiations are private.

Istithmar or its assets will probably be sold to help its parent repay the debt, the person said. Nakheel PJSC, the Dubai World unit behind a series of palm-shaped, man-made islands on the emirate’s coast, has a $3.52 billion Islamic bond due in December

One example of risky investing, according to Turner, came in 2007, when Dubai World bought about $5.5 billion of MGM Mirage stock at between $82 and $95 without any hedge. The stock now trades at about $12.

Refinancing Dubai’s debt became more difficult with the onset of the global credit crisis as lending froze. It has about $80 billion of outstanding corporate and government debt, according a report by Moody’s in February. That almost matches the emirate’s $82 billion gross domestic product in 2008, the report said.

A Dubai Investment Arm Struggles With Debt Load NYT

Set up in 2003, Istithmar came to be seen as the public face of a brash, acquisitive Dubai, which, unlike more conservative sovereign funds operating in the region, deployed high levels of leverage to finance a shopping spree that included the Queen Elizabeth 2 luxury liner; the department store Barneys New York; a stake in Cirque du Soleil, from Montreal; as well as luxury hotels in New York like the W on Union Square and the Mandarin Oriental on Columbus Circle.

Most of these investments — including that in Perella Weinberg Partners, the investment boutique, and GLG Partners, the asset management company — were done at the top of the market, from 2005 to 2007.

Istithmar was in many respects a scaled-down version of Dubai — using bravado, debt and some dollops of cash to invest in global markets

Dubai Update.....The Upcoming Skyscraper Tsunami.....

Flashback / Rückblende Feb 2009

In February, Dubai announced a $10 billion bond offering. It was fully subscribed by the central bank of the United Arab Emirates, making it essentially a federal bailout. The Dubai government has used the money to help government-related entities pay off debt.

Dubai is calling the deal between of Emaar with a 100 percent state controlled company a merger.....Good joke...They won´t laugh in Abu Dhabi / UAE for sure.....I´m not sure how long Abu Dhabi ( see also No Kidding.... Dubai May Need Help To Repay Debt...., Dubai's bail-out, Dubai Gets $10 Billion Bailout to Ease Debt , Big spending Dubai may have to be bailed out by Abu Dhabi ) will be "glad" to bail Dubai out..... I assume the next time $ 10 Billion won´t be enough.......

Dubai nennt den Deal zwischen Emaar ( bauen u.a. den modernen Turm zu Babel.... ) und einer anderen Firma die zu 100% im Staatsbesitz zwar eine Fusion. Guter Witz.....In Abu Dhabi / UAE wird man darüber aber wohl kaum lachen ...... Schön zu sehen das der Größenwahn, der nirgends so ausgeprägt gewesen ist wie in Dubai, früher oder später zum scheitern verurteilt ist. Bin gespannt wie lange Abu Dhabi / UAE ( siehe No Kidding.... Dubai May Need Help To Repay Debt.... , Dubai's bail-out, Dubai Gets $10 Billion Bailout to Ease Debt , Big spending Dubai may have to be bailed out by Abu Dhabi ) noch willens ist Dubai mehr oder weniger vor dem Kollaps zu bewahren.... In jedem Fall werden 10 Mrd $ beim nächsten Mal wohl nicht reichen....... UPDATE: ein aktueller Lagebricht von Guido Mingels / Die Zeit Goodbye, Dubai Tip Top!



Dubai Index Drops Most Since November on Emaar’s Merger Plans
June 28 (Bloomberg) -- Emaar Properties PJSC pushed Dubai’s index to its biggest decline in more than seven months on concern shares of the Middle East’s biggest property developer may be suspended or diluted pending a potential merger.

Dubai-based Emaar dropped 10 percent, the maximum daily limit allowed, after the company said it’s in talks to merge with state-controlled Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC, all units of Dubai Holding LLC.

The new entity will have 13.4 billion dirhams ($3.65 billion) in debt obligations, representing 7 percent of total assets, Emaar said today.

“Investors are worried a merger may mean a long share halt as is the case with Amlak and Tamweel,” said Mohamed Dwaikat, a broker at Al Fajer Securities in Abu Dhabi. “There is also concern about a possible dilution of the shares.” Amlak Finance PJSC and Tamweel PJSC, the United Arab Emirates biggest mortgage firms, haven’t traded since November pending a planned merger.

The Dubai Financial Market General Index lost 6.1 percent, the biggest fall since November, to 1,745.07, trimming the gain for this quarter to 11 percent. Abu Dhabi’s ADX General Index retreated 2 percent, paring this year’s advance to 7.7 percent.

Emaar, which is building the world’s tallest tower and makes up about 20 percent of Dubai’s index,fell to 2.89 dirhams.

Al Mal Capital PSC suspended its recommendation on the company, saying the planned merger could be “potentially dilutive” for Emaar shareholders.

Dubai Holding is a 100 percent state-controlled entity, while the government of Dubai owns about a 31 percent stake in Emaar, Bloomberg data show.

> At least Dubai´s sovereign debt rating is better than Iceland´s............

> Dubai schafft es immerhin Island in Scahen Kreditwürdigkeit zu schlagen.......



> Judging the following project ( see Dubai plans 'moving' skyscraper BBC) i think the term megalomaniac isn´t far-fetched....... I´m pretty sure there is ZERO chance that this "vision" will be build. The following clip is from mid 2008 and clearly a sign how far this bubble has been pumped up....

> Bei Betrachtung der nächsten "Vision" ( siehe Dubai plans 'moving' skyscraper BBC ) ist der Begriff "Größenwahn" sicher nicht zu hoch gegriffen....... Gehe jede Wette ein das dieses Objekt niemals gebaut werden wird. Der nachfolgende Clip ist von Mitte 2008 und zeigt eindrucksvoll welche Aussmaße die Blase zwischenzeitlich angenommen hat.



> Thank god there isn´t a lot of new space coming online .......;-) Now combine the upcoming glut with the sky high price level ( HT Paul Kedrosky )...... DOH! As far as i can see i think not an insignificant amount of the regions SWF will be needed to prop up the banking sector......

> Gottseidank kommt in nächster Zeit ja kaum neues "Material" auf den Markt......;-) Die beste "Medizin" um das bereits jetzt astronomisch hohe Preisniveau ( Dank an Paul Kedrosky ) zu halten..... Denke das ein nicht unwesentlicher Teil der Sovereign Wealth Funds in der Region demnächst benötigt werden um das heimische Bankensystem zu stützen.......

Future Dubai skyscrapers Wikipedia
Under construction Burj Dubai · Pentominium · Burj Al Alam · DAMAC Heights · Princess Tower · Marina 101 · 23 Marina · Emirates Park Towers Hotel & Spa · Elite Residence · Lam Tara Towers · D1 · The Marina Torch · Infinity Tower · Al Yaquob Tower · The Index · HHHR Tower · Ocean Heights · Ahmed Abdul Rahim Al Attar Tower · Central Park Towers · I&M Tower · Dubai Pearl · Sulafa Tower · G-Tower · Mag 218 Tower · Acico Twin Towers · Marina Pinnacle · Khalid Al Attar Tower 2 · Vision Tower · Ubora Commercial Tower · Conrad Dubai · Metro Tower · Al Tayer Tower · Churchill Towers · Sama Tower · The Buildings by Daman · Rolex Tower · Anantara Towers · Tiara United Towers · Al Bateen Tower · Trident Grand Residence · Latifa Tower · Executive Towers · Grosvenor House The Residence · Concorde Tower · Platinum Tower · Dubai Jewel Tower · Jumeirah Bay · Sidra Tower · Dubai Tower · Tiffany Towers · Silver Star · The Bay Gate · Dubai Islamic Bank Tower · Jumeirah Al Khor Residence · Pier 8 · Iris Bay · Liberty House · Goldcrest Executive · Dubai Gate 1 · The Prism · AG Tower · AU Tower · Lake Point Tower · Swiss Tower · Goldcrest Views 2 · The Residences · Silverene · Dubai Arch Tower · Laguna Tower · Verde Residences and Offices

Approved Dubai Towers Dubai · Lighthouse Tower · Al Sharq Tower · The Skyscraper · Al Hekma Tower · Providence Tower · The Palm Trump International Hotel & Tower · Abjar Tower · Nili Tower · ARY Digital Tower · Boraq Tower · The Sheffield Tower · Fortune Araames · Duja Tower · El Matador Tower · Arabian Crowne · Mag 220 Tower · The Dome · Jumeirah Business Center 1 · The Prime Tower · The Forum

Proposed Dubai City Tower · Nakheel Tower · Anara Tower · 1 Park Avenue · Meraas Tower · Marina Sky Towers · Marina 106 · Dynamic Tower · P-17 · The Wave Tower · Signature Towers · His Highness Sheikh Hasher Tower · Beachfront Tower Hotel · Beach Towers · Time Residences · Al Ghaith Tower

> I doubt that even one proposed or approved object will be realized.... Wouldn´t surprise me if we see will something similar what happened in Bangkok ......

> Von den genehmigten bzw. angedachten Projekten wird sicher kaum eines je verwirklicht werden..... Denke es grenzt bereits an ein Wunder wenn die bereits im Bau befindlichen Objekte fertiggesetllt werden.....Könnte leicht passieren das sich ähnliches wie in Bangkok wiederholt......

How Not To Restore Confidence....."United Arab Emirates & Spain Edition"

So much for the transparancy...... Looks like the prospects for the gulf region reagion are somewhat "clouded"...... This is especially true for the Dubai where the drop height is particularly high..... :-) ( see also No Kidding.... Dubai May Need Help To Repay Debt....)

Einmal mehr zeigt sich das der Ruf nach mehr Transparenz rund um den Globus zu hören ist nicht mehr als Lippenbekenntnisse sind. Schade das man nicht mehr nur explizit auf Fed & Co aus den Staaten schimpfen kann........ Die Aussichten für die noch vor einem Jahr "unverwundbare" Golfregion haben sich nicht nur wegen des fallenden Ölpreises merklich eingetrübt. Zum Glück sind immerhin Teile der Region dank Ihrer Sovereign Wealth Funds nicht von der Gnade ausländischer Kreditgeber abhängig. Dummerweise gilt das nicht für Dubai wo die Fallhöhe besonders hoch ist...... :-) ( siehe auch No Kidding.... Dubai May Need Help To Repay Debt.... )

Hat tip to Tim and his blog The Mess That Greenspan Made

‘Banks are hereby required not to be in a hurry to publish their audited annual accounts’ FT Alphaville

Yes, that’s right.

If you happen to be a bank in the United Arab Emirates you have most likely received the above request from the central bank, according to reports from the Zawya Dow Jones newswire. Could the regional lender of last resort be trying to buy some time? As the agency reports (our emphasis):

DUBAI (Zawya Dow Jones)–The United Arab Emirates’ central bank has sent letters to local lenders asking them not to rush the announcement of their fourth-quarter earnings and to be fair in evaluating their investments, a senior banker said Tuesday. “The central bank sent letters to banks on Saturday to ensure prudent application of disclosure principles.

The central bank asked banks not to rush to announce their results,” the banker, who spoke on condition of anonymity, told Zawya Dow Jones. Under U.A.E. regulations, local banks have a 45-day period from Dec. 31 to report their results. “Banks are hereby required not to be in a hurry to publish their audited annual accounts,” Central Bank Governor Sultan bin Nasser Al Suwaidi said in the letter, seen by Zawya Dow Jones. “It’s a very prudent step to ensure the central bank is able to provide guidance for consistency across all banks in the U.A.E., in particular regarding determination of fair value and on general provisioning such as portfolio level rovisions,” said Sanjay Uppal, chief financial officer at Emirates NBD.

In the letter, the central bank tells bankers that both it and the federal government are aware of the impact the global credit crisis is having on world markets and are addressing the issue of liquidity in the U.A.E., but that banks also have a role to play. “Under these circumstances, banks should exercise vigilance and utmost caution before they publish their audited annual accounts for the year 2008,” Suwaidi said, adding that world markets remain highly volatile as investors have been prone to overreact and as a result securities may be hard to assess. Suwaidi said the central bank has started to examine the “true value” of asset quality in banks. But gauging this may take more time than under normal circumstances, as the central bank needs to identify carefully the nature and value of the assets, Suwaidi said. The central bank also asked financial institutions to build adequate provisions and reserves.

From Creditflux via Alea / FT Alphaville

Spanish website Cotizalia reports that Spain’s banks and cajas are negotiating on a one-to-one basis with the Bank of Spain to “fine-tune” their 2008 accounts in order to avoid taking catastrophic write-downs on lans.According to the article, the central bank has agreed to allow the banks to increase the “calendar of amortisation” of these troubled assets, which are said to be mostly loans to property developers.

Debt Pile Looming Over European Firms

I´ll bet that some will damm their debt financed aquisitions & stock buybacks ( for some "amusing" examples see "I Want My Buyback Back" ) ........ I assume that during the coming at least 2 years it won´t be the earnings that will dominate the stockprice .... It will be all about the balance sheet....... The management will be forced from a shareholder value oriented mood to "serve" their new masters aka the bondholders.......

Kann mir gut vostellen das einige inzwischen Ihre schuldenfinanzierten Übernahmewahn & die Aktienrückkäufe bereuen ( einige "amüsante" Beispiele gibt es hier zu bewundern "I Want My Buyback Back" ) ...... Bin mir ziemlich sicher das zumindest auf Sicht von 2 Jahren weniger die Gewinnsituation als die Bilanzqualität das beherrschende Thema der Aktienmärkte sein werden..... Das Management wird zukünftig nicht mehr die Aktionäre sondern die Bondholder in den Mittelpunkt Ihrer "Bemühungen" stellen......

> The trouble is getting even greater when you combine the graph with the spread charts via Mish

> Wie prekär die momentane Lage ist zeigt mehr als eindrucksvoll wenn man die o.g. Grafik mit den nachvolgenden Charts kombiniert Unternehmensanleihen auf Tauchstation via Zeitenwende/Mish

WSJ European companies, already in the middle of an economic downturn, face another uphill struggle as they seek to refinance $242.6 billion of maturing debt over the coming year, according to credit-ratings firm Standard & Poor's.

"Funding pressures in Europe have escalated sharply since September as stress in the global financial system accelerated," the report said.

According to the report, European companies will be forced to pay back or refinance $586.3 billion through 2011, with more than 40% of that debt coming due over the next year.

French nonfinancial corporate issuers account for the largest portion of debt to be refinanced, with 26%, followed closely by the U.K., Germany, Netherlands and Italy, which have a combined share of 79%.

No company rated below single-A has managed to access the bond market in recent months, offering little hope for companies further down the ratings scale

The report examined all debts rated by S&P including bank loans, notes and bonds.

>The banks will have to pray that the companies manage the refinancing of the debt... Otherwise they are forced to tapp corporate bank lines .....

> Die Banken dürften bereits jetzt anfangen zu beten das es möglich sein wird diese fälligen Anleihen zu refinanzieren...... Ansonsten bleibt den Firmen nichts anderes übrig als die bestehenden Kreditlinien der Banken anzuzapfen...... Sicher nicht der glücklichste Umstand wenn nahezu alle Banken dringend auf Ihre Kapitalstärke achten müssen......

Credit terms increasingly tied to risk FT Alphaville - US and European companies renewing short-term credit facilities are being forced to accept terms that link interest payments to their creditworthiness. In recent months, AT&T, Wal-Mart, Caterpillar, Halliburton, Nokia and Novartis have all renewed their short-term financing arrangements, including revolving credit facilities, and found that “relationship pricing” is no longer available. Instead,

companies are finding that banks - which had offered cheap loans to top corporate clients - now price these facilities based on measures of credit risk. In most cases, credit default swaps are being used.

The first deal for this new type of pricing for revolving loans, totalling an estimated $6,000bn worldwide, was done in April

Since then, such terms have become widely used. Banks hope this will discourage companies from tapping these credit lines unless they absolutely need to. Already, at least 20 such deals for 364-day revolving credit facilities – a type of overdraft for companies to ensure access to funds in case markets shut down – have been completed and at least as many are in the pipeline.

Update via Bloomberg Borse Dubai May Refinance $4.2 Billion of Loans at Higher Costs

Borse Dubai Ltd., the Gulf emirate's state-owned operator of exchanges, is in talks to refinance $4.2 billion of loans at interest rates tied to the price of credit- default swaps, raising the cost of the debt, said three bankers with knowledge of the transaction.

The new debt may pay interest of as much as 6 percentage points over the London interbank offered rate on loans for three years, said the bankers, who declined to be named because the negotiations are private. That compares with a margin of 1.1 percentage points on the existing loans, which were used to buy Sweden's OMX AB last year

No Kidding.... Dubai May Need Help To Repay Debt....

I have wondered about Dubai early on in 2007 ( see Dubai / Borrow To Build.....? ) what fundamentals are behind the boom in Dubai. It really looks like lots of the megalomaniac projects that have been anounced and are already under construction will face some serious "headwinds"........ In fairness it has to be mentioned that in 2007 only 7 percent of GDP was oilrelated and lots of the giant projects and investments are an attempt to transfrom the economy... It seems that the pace in recent years was too fast and it feels like an attempt to ramp things up with a crowbar...... SEE UPDATE AT THE END OF THE POST

Ich habe mich bereits in meinen bescheidenen Anfängen als Blogger im Anfang 2007 in Dubai / Borrow To Build.....? gewundert was genau in Dubai abgeht. Es sieht in der Tat so aus als wenn ein guter Teil der größnwahnsinnigen Projekte die angekündigt und die sich fast immer auch schon im Bau befinden in nächster Zeit in erhebliche Probleme laufen könnten...... Müßte lügen wenn ich nicht ein gewisses Maß an Schadenfreude verspüren würde...... Fairerwaise muß man erwähnen das Dubai nur noch 7% des BSP dem Öl zu verdanken hat und die gigantischen Projekte ein Versuch sind die Wirtschaft radikal zu transformieren..... Leider sieht es so aus als wenn hier das Tempo in den letzten Jahren doch erheblich zu hoch gewesen ist und das ganze evtl., doch einem Versuch mit der Brechstange gleicht....... BITTE DAS UPDATE AM ENDE DES POSTINGS BEACHTEN

Dubai May Need Help From Abu Dhabi to Repay Debts

Oct. 13 (Bloomberg) -- Dubai may depend on support from neighboring Abu Dhabi and the federal government of the United Arab Emirates to help pay for a surge in borrowing, Moody's Investors Service Inc. said.

Government-controlled companies owe at least $47 billion in total, more than Dubai's gross domestic product, according to Moody's data based on economic statistics from 2006.

``We believe that leverage raised primarily through state- owned corporations will continue to grow faster than GDP for at least the next five years, during which time the Emirate's susceptibility toward execution, financing and geopolitical risks will be at its most pronounced,'' Philip Lotter, Dubai- based senior vice president at Moody's, said in a report today.

Dubai has borrowed to fund real estate projects including Burj Dubai, the world's tallest tower, and to buy stakes in Deutsche Bank AG, European Aeronautic Defence and Space Co. and Standard Chartered Plc, as it seeks to reduce dependence on its dwindling oil reserves.

Abu Dhabi, by contrast, owns more than 90 percent of the U.A.E.'s oil reserves and nearly 8 percent of the world's total. The Abu Dhabi Investment Authority, its sovereign wealth fund, has assets of between $250 billion and $875 billion, according to the International Monetary Fund.

Dubai controls its economy through state-owned companies that dominate each major industry. Dubai Holding LLC, which groups assets belonging to Dubai Ruler Sheikh Mohammed bin Rashid al-Maktoum, owns hotel chain Jumeirah Group and Dubai International Capital, which unsuccessfully bid for Liverpool Football Club earlier this year.

Default Swaps
The cost of insuring Dubai Holding's bonds has increased nearly four-fold since May, according to traders of credit default swaps. Contracts protecting Dubai Holding Commercial Operations medium-term notes for four years traded at 679.3 basis points on Oct. 10, up from 172.99 at the beginning of May, CMA Datavision prices show.

Dubai World, a state-owned holding company, acquired almost 10 percent of Kirk Kerkorian's MGM Mirage last year for about $5.1 billion. MGM shares have since tumbled to $16.80 from $84 when the deal was agreed.

> The folling quote is from my post Deutsche Bank Is Doubling Down In Vegas.....

> Der nachfolgende Kommentar stammt aus meinem Post Deutsche Bank Is Doubling Down In Vegas.....

Deutsche will have to raise its bet with another $1 billion investment in the development, at the same time local operator Boyd Gaming has shelved a $5 billion project on the Strip. That looks like a risky double-down for a bank already exposed to MGM Mirage's cash-strapped $11 billion CityCenter project nearby.

> I´m not sure if they are already on the hook but when even Dubai World is late in raising as much as $3.5 billion for their $11.2 billion CityCenter project in Las Vegas it is not a very good sign.....MGM,Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan . Watch the folling clip and it is no wonder why they are falling behind..... (clip was deleted.... I wonder why....)

> Ich bin mir nicht sicher ob die Deutsche Bank hier schon im "Feuer" steht. Wenn aber selbst Dubai als Hauptinvestor momentan Probleme hat Kredite zu bekommen ist dies sicher kein gutes Zeichen..... MGM,Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan . Schaut Euch den Clip an und es ist wenig verwunderlich warum es Finanzierungsprobleme gibt....... Der Clip ist inzwischen gelöscht worden.... Leicht auszumalen warum.....

Deutsche Bank shares have fallen nearly 70 percent since Dubai government-owned DIFC Investments bought a 2.2 percent stake for about $1.8 billion in May 2007.

``In most countries there are identifiable delineations between the public and private sectors,'' Tristan Cooper, Moody's Middle East sovereign analyst, said in the statement. ``In Dubai, however, the state corporatist model plus the fact that the ruler and his closest relatives form the core of the government, make it difficult to draw such distinctions.''

`Implicit' Support
Abu Dhabi and Dubai are the two-largest emirates in the seven-member U.A.E.

While Dubai's economic model ``has proved successful to date, cumulative liabilities are currently rising faster than investments are able to generate returns, which increases Dubai's medium term susceptibility to execution risks and necessitates a clear understanding of wider implicit federal support when rating key government-backed corporations,'' Lotter said

UPDATE

Dubai World Has No Problem Borrowing, Chairman Says Bloomberg

``We don't have any problem raising money,'' Dubai World Chairman Sultan Bin Sulayem said in a telephone interview in Dubai today.

``Why would we announce a big tower if we can't afford to pay for it?''

> I´ve heard other people saying similar things way too often during the paste few years....

> Den Satz habe ich in den letzten Jahren schon einige Male gehört.......

Dubai's state companies have lost at least $6 billion on their five biggest public investments in the past two years, led by Dubai World's stake in casino operator MGM Mirage. Losses on undisclosed investments may be $30 billion, said Luis Costa, emerging-markets debt strategist at Commerzbank AG in London.

``About 80 percent of Dubai World is non-transparent, so it's a very tough game,'' said Costa. ``Deals such as the world's tallest tower may now need more capital injection from the state or may even fail.''

Ruler Sheikh Mohammed bin Rashid al-Maktoum has borrowed to replace Dubai's dwindling revenue from oil with earnings from tourism, finance and real estate. State-owned carrier Emirates has increased its fleet to the largest in the Middle East and has the most orders worldwide for the Airbus A380 superjumbo, as the government seeks to double tourists per year to 15 million by 2015.

Casino
Dubai World owns DP World Ltd., the third-largest international port operator, Istithmar World, a private equity firm that acquired Barney's New York Inc. last year, and Nakheel PJSC, builder of the manmade palm-shaped islands in the Persian Gulf. The developer is also building the Nakheel Tower, which will surpass the Burj Dubai, currently the world's tallest at 707 meters.

> I´ll bet that this Skyscraper ( see Nakheel Tower / Wikipedia ) won´t be build.... In hindsight Dubai should be grateful that the location had to be changed and the construction hasn´t started yet......

> Ich lehne mich mal aus dem Fenster und behaupte das dieser Turm zu Babel ( siehe Nakheel Tower / Wikipedia ) niemals gebaut werden wird... Im Nachinnein kann Dubai froh sein das sich durch einen veränderten Bauplatz die Konstruktion verzögert hat und der Bau noch nicht begonnen hat.....

Costs are rising on contracts to protect against a default by Dubai Holding LLC, which groups assets belonging to Sheikh Mohammed, including the Jumeirah Group hotel chain. Credit- default swaps rose almost four-fold in the past six months to 684 basis points, the highest in at least four years.

Dubai Holding Commercial Operations Co.'s 10-year bonds due 2017 fell 0.8 percent today, lifting the yield to a record 13.2 percent, Bloomberg data show.

``We are a very solid company and well diversified,'' bin Sulayem said. The notion of Dubai corporations having to rely on Abu Dhabi for funding ``is news to me,'' he said.

2nd. UPDATE

Dubai debt puts emirate at risk in slowdown FT

In a report obtained by the Financial Times, the ratings agency says Dubai would lack the financial muscle to cover its debt in the event of a systemic shock, such as a real estate collapse, making it reliant on Abu Dhabi to bail it out.

Publicly recorded debt levels have reached 103 per cent of 2006 GDP, the latest available figure, without including the leverage assumed by aggressive investment companies such as Istithmar and Dubai International Capital.

Gulf States Counter M&A Slowdown With $25 Billion of Takeovers

This should be really no surprise. What else ( except gold ) should they buy with the depreciating $......This trend is going to be a support for the equity market for years to come and with the recent central bank action the appetite for bonds should be "subpar"......

Das sollte wirklich keinen überraschen. Was sollen die auch anderes (ausser Gold) mit Ihren täglich verfallenden $ kaufen...... Dieser Trend wird sicher noch auf Jahre hinaus eine wichtige Unterstützung für die weltweiten Aktienmärkte spielen. Und nach den letzten Aktionen der Notenbanken rund um den Globus dürfte das Vertrauen in Bonds generell gelitten haben......

Key will be to identify the markets which will benefit the most. And i doubt that US$ assets will be a winning bet.....

Entscheidend wird wohl sein die Märkte zu identifizieren die am meisten von diesen gewaltigen Geldströmen profitieren werden. Und ich nicht davon aus das der Dollarraum zu den Gewinnern zählen wird.

via Brad Setzer

Norway has long held only about 35% of its oil revenue in dollars, Russia now has less than 50% of its reserves in dollars and a few Gulf states have also rather clearly trying to reduce the dollar’s share of their (growing) portfolios. In 2000, for example, as much as 85% of the Kuwaiti investment authority’s assets may have been in dollars. That total is now probably under 50% (KIA’s equity portfolio is certainly under 50%). ADIA reportedly shifted toward emerging economies a few years ago. And a host of Gulf funds now want to invest in emerging Asia …

In his now classic paper on the oil-exporting economies, Ramin Toloui of PIMCO calculates that if oil exporting economies invest 60% or more of their rising revenues in dollar assets, an increase in the price of oil is dollar positive (see figure 14). And if they invest less than 60% in dollar assets, a rise in the price of oil is dollar negative.

FT

The news that pushed the dollar lower on Thursday came from Saudi Arabia, where the central bank, which has pegged its currency to the dollar, decided not to follow the Fed by cutting by 50 basis points. That prompted speculation that the Saudis no longer want to peg to a currency in freefall.

Further, a long-term link between the dollar and the oil price has broken down. A high oil price used to mean a strong dollar as oil exporters put their money in dollars. But now we have record crude prices and the weakest dollar in decades.

The biggest risk is probably that there is some kind of protectionism going on to block state owned (also from China etc) in general. The discussion is already heating up in Europe (except in the UK).

Das größte Risiko ist wohl darin zu sehen das immer mehr Regierungen generell überlegen wie solche Deals die von staatlich geführten Fonds unternommen werden verhindert werden können. Der Trend zur Abschottung ist sowohl in Europa ( Ausnahme UK) als auch in den USA nicht zu übersehen.

Gulf Counters M&A Slowdown With $25 Billion of Deals

Sept. 21 (Bloomberg) -- The Persian Gulf states, flush with cash from burgeoning oil revenues, are buying overseas assets at a record rate and countering the paucity of acquisitions hampered by the summer's surge in corporate borrowing costs.

Abu Dhabi agreed yesterday to pay $1.35 billion for 7.5 percent of Carlyle Group, the world's second-biggest private equity firm. Dubai and Qatar took competing stakes in Nasdaq Stock Market Inc., London Stock Exchange Group Plc and Nordic bourse OMX AB. Qatar also won approval to examine the financial records of J Sainsbury Plc, the second-largest U.K. supermarket chain.

All told, the deals are worth $25 billion, according to data compiled by Bloomberg. The pace of international investments by Gulf states, which earn $1.2 billion a day from oil exports, is quickening as they seek to diversify beyond energy. The nations have already spent a record $68 billion on overseas acquisitions this year, the Bloomberg data show.

``They are not just putting their money in bank deposits and government bonds any more,'' said Eckart Woertz, chief economist for the Gulf Research Center in Dubai. ``They are after strategic assets.''

The record pace of global mergers fell in August to the slowest in two years as rising costs for credit eroded investor confidence. The three-month dollar London interbank offered rate, a lending benchmark, rose to 5.73 percent on Sept. 7 from 5.36 percent at the end of July. The rate fell to 5.21 percent yesterday after the Federal Reserve reduced interest rates for the first time in four years earlier this week.

Slowest Month
About $188 billion of deals was announced last month, the lowest amount since July 2005, according to data compiled by Bloomberg. The value of deals dropped after losses in subprime mortgage bonds contaminated debt markets, prompting a sudden increase in corporate borrowing costs and a slide in stocks.

Not in the Persian Gulf. The pace of takeovers may accelerate as oil trades at a record high and Dubai and Qatar race to lure international banks, asset managers and brokerages. Oil reached a record $83.90 a barrel in New York yesterday.

Based on the share prices of LSE, Nasdaq, OMX and Sainsbury on Sept. 19, Dubai's investment would be $2.5 billion and Qatar's would be $21.5 billion. ....

``Qatar is a clone of Dubai,'' said Haissam Arabi, a Dubai- based managing director of asset management for Shuaa Capital PSC. ``They have taken their lead from Dubai on most fronts. Dubai had Emirates airline, then Qatar set up Qatar Airways. Dubai established itself as a tourist destination, and then Qatar tried to position itself as such. And now as financial centers, Dubai moved and Qatar followed.''

Dubai and Qatar are overshadowing Bahrain's traditional position as the Persian Gulf's financial hub. Dubai is the second-biggest sheikhdom in the United Arab Emirates after Abu Dhabi. The six Gulf Cooperation Council states are the U.A.E., Bahrain, Kuwait, Qatar, Oman and Saudi Arabia.

Mubadala Development Co., an investment company owned by the government of Abu Dhabi, will buy a 7.5 percent non-voting stake in Carlyle.

Sainsbury, based in London, yesterday softened its opposition to a takeover bid by Qatar after the emirate said it would borrow less to fund the deal.

Cooperative Takeovers
The Gulf states sometimes cooperate on acquisitions. Sheikh Hamad bin Jassim bin Jaber al-Thani, the Qatar Investment Authority's CEO and since April Qatar's Prime Minister, said in February the country may buy as much as 10 percent of Airbus SAS parent European Aeronautic, Defence & Space Co. because the shares are undervalued.

When Dubai International Capital LLC bought 3.12 percent of EADS in July, some of its money came from Qatar, according to Chief Executive Officer Sameer al-Ansari.

Blocked Ports
Dubai generated 3 percent of its gross domestic product from oil last year and has a population of about 1.5 million. As oil wells run dry, the emirate is building the world's tallest tower, offshore islands in the shape of palm trees, and a leisure park three times the size of Manhattan.

It's also earmarked more than $82 billion for investment in aviation, including construction of the world's biggest airport.

The Gulf's overseas acquisitions haven't always succeeded. Qatar in December lost out to a group led by Macquarie Bank Ltd. in its bid to buy Thames Water Utilities.

Dubai-owned container port operator DP World last year agreed to buy London-based Peninsular & Oriental Steam Navigation Co. for $6.8 billion, only to be forced to sell P&O's U.S. port assets under pressure from lawmakers who threatened to block the takeover on the grounds of security.

New York Democrat Senator Charles Schumer said yesterday a deal that makes Borse Dubai the biggest shareholder in Nasdaq requires scrutiny.

``There are serious issues that need to be investigated,'' he said at a press conference in Washington. ``Questions must be asked and answered before the deal goes forward.''

dubai / borrow to build.....?

time for an update on dubai. to be honest i was at first surprised that even dubai has to borrow billions to build. but it looks this money is tied only to infrastructure projects. on the other hand the state owned developer of the palm islands has to issue billion $ bonds to build the island. i thought this kind of projects were financed with tons of petro$. at the same time they (state owned) buy trophy assets in london http://immobilienblasen.blogspot.com/2006/11/petrodollars-for-london-properties.html

but you cannot blame them for taking advantage of the narrow spreads and load up cheap debt.

zeit für ein update aus dubai. ehrlich gesagt war ich zuerst überrascht das dubai mrd an krediten aufnehmen muß um zu bauen. es sieht in diesem fall so aus als wenn dieses investitionen zumindest in die infrastruktur gehen. auf der anderen seite ist es erstaunlich das für den bau der berühmten inseln mrdanleihen begeben worden sind. ich dachte bisher immer die zahlen das aus den tonnen von ölgeldern. zur gleichen zeit kaufen staatliche investmentfirmen prestigeobjekte in london. aber warum sollte nicht auch dubai die extrem niedrigen kreditaufschläge nutzen?

maybe someone can help me to understand if the reserves from dubai are included in the $25 billion for the united arab emirates or in the plus $ 250 billion from abu dhabi investments authority.

i´m a little confused because dubai has an own investment arm (remember the failed port deal in the usa. they also own a stake in daimler and bought the tussauds http://www.dubaiholding.com/ / search in the news on the right)

evtl. kann mir einer von euch weiterhelfen. ich habe problem zu verstehen ob die reserve von dubai in den 25 mrd$ der vereinigten arabischen emirate oder den plus 250 mrd$ der abu dhabi investments enthalten sind. bin deshalb etwas verwirrt weil dubai einen eigene investmentfirma betreibt.(einige erinnern sich evtl. noch an die gescheiterte hafenübernahme in den usa, zudem sind sie größaktionär bei daimler und haben zuletzt das wachsfigurenkabinett von madame tussauds gekauft. http://www.dubaiholding.com/ )


Dubai to Borrow at Least $10 Billion for Rail, Power

Feb. 12 (Bloomberg) -- Dubai plans to borrow at least $10 billion for new roads, power plants and an urban railway to spur economic expansion.

The Persian Gulf sheikhdom's borrowing will ``go into double-digit billions'' by 2009, .....

The government is taking advantage of bondholder demand after Dubai Holding LLC, a company managing state assets, received $13 billion of orders for a $2.5 billion sale of notes last month...

The second-largest of the United Arab Emirates states after Abu Dhabi, is seeking to spur economic growth of 11 percent a year to 2015 to help add 882,000 jobs. Dubai's oil wells are forecast to run dry within 20 years. Its population grew by 7.3 percent to 1.37 million last year, according to government data. (11% ....overheating.....? others countries like china try to slow down the economy . looks like the opposite/ bei 11% droht ne überhitzung. andere länder wie china probieren zumindest das wachstum einzudämmen. hier passiert das gegenteil.)

Economic growth last year pushed property prices up 20 percent, after rising 50 percent in 2005, . Dubai's hotels generated $3.8 billion in revenue last year and occupancy rates were the third highest after London and New York, Asharq al-Awsat reported today, citing a government official.

Light Railway
Dubai's development projects ``are capital intensive and I would expect them to be funded through a mixture of equity and debt,''

Dubai ruler Sheikh Mohammed bin Rashid al-Maktoumaims is developing the country to retain investors including Goldman Sachs Group Inc., Microsoft Corp. and Royal Dutch Shell Plc, which have set up their Middle East headquarters in the emirate.

In 2005 Dubai awarded Mitsubishi Corp. a $3.4 billion contract to build a 45-mile light railway, the Persian Gulf's first commuter metro. The Dubai Water and Electricity Authority plans to spend about $5.4 billion by 2012 to boost power generating capacity to 10,000 megawatts, according to a May report by Emirates Industrial Bank.

Phone Bonds
Dubai Holding sold its bonds to help repay debt incurred when it bought stakes in Maltacom, Malta's biggest telephone company, and Tunisie Telecom, Tunisia's biggest mobile phone provider. Demand prompted Dubai Holding to cut the yield offered to investors to 105 basis points over U.K. government bonds from an initial guidance of about 115 basis points ...

Moody's rates Dubai Holding's debt at A1, its fifth-highest investment-grade ranking. Standard & Poor's rates the debt an equivalent A1......

Palm Tree Islands
Nakheel PJSC, a state-owned developer building three palm tree-shaped islands off Dubai's coast, in December issued $3.52 billion of Islamic bonds in the world's largest sale of such securities. The company Nov. 7 said it aimed to sell $2.5 billion of three-year Ijarah sukuk, and then increased the issue after receiving bids for 2.5 times the debt on offer.

Europeans bought 40 percent of Nakheel's sukuk,..... More than 95 percent of the orders for Dubai Holding's bonds came from outside the Middle East, according to Lewell.

somehow ironic, isn´t it. we finance their islands..../ irgendwie ironisch, oder? ..............

"The `Skyscraper Curse' Is Worth Watching in 2007"

an alternative indicator. but a fascinating one. it also reflects some importend topics like the carry trade, loose credit etc. (see labels at the bottom of the post). i hope that someone from the us can tell me if my projection on the chicago project is correct.

zwar ein alternativer indikator. trotzdem interessant. er streift zudem wichtige themen wie den carrytrade, wild wuchernde kreditmärkte etc.... (bitte dazu die labels am ende des posts beachten)

Dec. 11 (Bloomberg) -- ...... I'm wondering if it might make more sense to look at the skyline.

Standing out amidst the tangle of skyscrapers is the 1,671- foot (509 meters) Taipei 101, which is currently the world's tallest building. Its presence, coupled with a worsening political crisis that could trip up the economy, reminds one of the ``Skyscraper Curse.''

A bizarre suggestion, perhaps, and certainly an unscientific one. Yet history shows an uncanny correlation between tallest building projects and financial crises. Be it in Kuala Lumpur in 1997, Chicago in 1974, New York in 1930 or the biblical Tower of Babel long ago, mankind's penchant for architectural overreach is a strangely reliable omen of troubles.

A coincidence? Perhaps, yet economists such as Mark Thornton, senior fellow at the Ludwig von Mises Institute in Auburn, Alabama, argue that skyscrapers can speak volumes about a nation's wealth, technological prowess, ambition and, perhaps most importantly, hubris.

Rome's Last Days
``It's these features that make skyscrapers, especially the construction of the world's tallest building, a salient marker of 20th-century business cycle,'' Thornton argues.

For a time in the early 2000s, analyst Andrew Lawrence, then with Deutsche Bank Securities in Hong Kong, published a periodic ``Skyscraper Index'' for investors. As 2007 approaches, perhaps we need to start producing more building-project barometers.

Take Dubai, which is undergoing one of history's greatest construction booms. After visiting the city recently, economist Claudia Zeisberger of the Asia Pacific Institute of Finance at Insead in Singapore quipped: ``All the building going on made me feel like I was experiencing the last days of ancient Rome.''

Perhaps it is just a coincidence, but "dubai" is putting the finishing touches on a 2,300-foot building that will top Taipei 101.

In "china"China, the 101-story Shanghai World Financial Center will become the most populous nation's tallest building. And a residential construction project in "chicago"will top the Sears Tower, currently North America's tallest skyscraper. ( i almost rule out that the chicago project will ever get startet! the dubai and shanghai building have already breaking ground./ ich schließe fast zu 100% aus das das chicago projekt jemals gestartet wird. die projekte in dubai und shanghai sind schon gestartet.)

Excess Cash
In India, developers are planning to build a 140-story skyscraper in the city of Gurgaon, near New Delhi. In 2008, South Korea will complete the 1,903-foot International Business Center, which the government hopes will solidify Seoul's place as a global business hub. Massive skyscrapers also are being considered from Australia to Russia to Brazil.

``It all makes sense given current conditions,'' Thornton says.

Even though the Federal Reserve, Bank of Japan and European Central Bank have been raising interest rates, markets are still awash in excess cash. Loose monetary policies have fueled investment frenzies in London, Shanghai, Tokyo and elsewhere. They have increased the amount of leverage in the global financial system, raising the stakes if growth slows markedly in 2007.

Over-investment and financial speculation led to each of the Skyscraper Curse episodes during the 20th century. Coincidence or not, history suggests such projects are often less about technological innovation than economic booms. The desire to have the tallest building correlates suspiciously well with sudden capital inflows that pump up credit creation and confidence.

Presaging Gloom
In 1908, for example, New York's 47-floor Singer Building opened, followed by the 50-story Metropolitan Life Building. Both were planned, financed and raised while the U.S. was in the midst of the Panic of 1907, a credit crunch that necessitated help from financier J.P. Morgan.

In 1929, the opening of 40 Wall Street and the Chrysler Building were harbingers of the worst-ever U.S. meltdown, the Great Depression. A year later, the Empire State Building became the world's tallest building, presaging years of gloom.

The 1970s saw the completion of New York's World Trade Center and Chicago's Sears Tower. They opened amid stagflation in the U.S. economy, a fiscal crisis in New York and the breakdown of the Bretton Woods monetary system.

Tall Task
More recently, Malaysia's 1,483-foot Petronas Towers were being completed during the Asian crisis. .....

Thickening the plot: the plunge in the U.S. dollar analysts have predicted for years may come in 2007. Other risks include a slowdown in China, higher global interest rates and inflation and geopolitical risks from North Korea, Iran, Iraq and a number of other regions. Oil prices also might climb anew.

Add in the rapid increase in the number of hedge funds and the proliferation of the so-called yen-carry trade. The trade, a favorite among hedge-fund managers, involves borrowing in ultra- low-interest-rate yen and re-investing the funds in riskier, higher-yielding assets elsewhere. It is believed to have greatly increased leverage in markets around the globe.

None of this means a crisis is in the cards ........

petrodollars for london properties

this story shows you very good that nobody is buying for the rentyield. the gilts (gouverment bonds) are yielding higher (risk free!). at least dubai has enough money to waste........
http://immobilienblasen.blogspot.com/2006/09/dubai.html#links

das ganze zeigt klar das in lonfon keiner wegen der guten mietrendiete kauft. britische staatsanleihen rentieren risikofrei höher! immerhin kommt es bei dubai nicht auf die kohle an......
http://immobilienblasen.blogspot.com/2006/09/dubai.html#links

make sure you read this story about london/bitte unbedingt diese story über london lesen.
http://immobilienblasen.blogspot.com/2006/10/london-calling-new-skyline.html#links



Dubai Buys London's Adelphi for 300 Million Pounds http://tinyurl.com/wkbva

Nov. 15 (Bloomberg) -- The Emirate of Dubai bought the Adelphi, one of London's best-known art deco buildings, for about 300 million pounds ($567 million) to capitalize on surging rents in the city.
(i doubt that the yields are good...., see chart)


Istithmar PJSC, a private-equity company owned by the government of Dubai, purchased the 300,000 square-foot building in London's West End on Nov. 13, said Alan Rogers, head of the firm's real estate unit. Tenants of the 68-year-old Adelphi, located near the Strand on the river Thames, include the U.K.'s Department of Work and Pensions and Hess Corp., the fifth- biggest U.S. oil company.

``Adelphi is a trophy office building,'' Rogers told reporters in Dubai, United Arab Emirates today. ``It is in a prime location and is complementary to our earlier investment in Trafalgar Square.''

Middle Eastern investors, flush with oil wealth after crude prices almost doubled since 2003, spent $6 billion on overseas property in the first half of 2006, mainly in London and New York, according to a report by Jones Lang LaSalle Inc. published last month. Prime West End office rents are the highest in the world. ( yields not!)