Since, state-owned Dubai World signed a final accord with creditors to restructure its debt, about USD25 billion on 23rd March 2011, investors & market participants perceive that it would help in restoring the confidence in Dubai's ability to repay the debt.
· Dubai dollar bond & extra yield shrinks
The yield on Dubai's debt maturing in November 2014 fell to a record low of 5.24 percent & the extra yield investors demand to own Dubai's 6.396 percent dollar bond dropped to 251 basis points, lowest ever.
HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index shows that the extra yield investors demand to hold the region's sukuk over the London interbank offered rate narrowed by 68bps to 322bps, since Dubai World signed a final debt deal with its creditors
· Increase fund flows to Dubai's high yield bonds
According to EPFR Global, Dubai benefited 64% jump in flows to higher-yielding bonds in 1Q2011
· Dubai's five year Credit Default Swap (CDS) declining
Dubai's 5 year CDS is currently trading at near 52- weeks low, declined by 9% from 2010's average & plunge by 6% yea-to-date while Abu-Dhabi's 5-year CDS is currently up by 8% from 2010's average.
Interestingly, Dubai is the only place in GCC whose CDS declined the most year-to-date, mainly because of Dubai world deal, despite current uprising in the MENA region.
Source: Bloomberg & Reuters
The yield on Dubai's debt maturing in November 2014 fell to a record low of 5.24 percent & the extra yield investors demand to own Dubai's 6.396 percent dollar bond dropped to 251 basis points, lowest ever.
HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index shows that the extra yield investors demand to hold the region's sukuk over the London interbank offered rate narrowed by 68bps to 322bps, since Dubai World signed a final debt deal with its creditors
According to EPFR Global, Dubai benefited 64% jump in flows to higher-yielding bonds in 1Q2011
· Dubai's five year Credit Default Swap (CDS) declining
Dubai's 5 year CDS is currently trading at near 52- weeks low, declined by 9% from 2010's average & plunge by 6% yea-to-date while Abu-Dhabi's 5-year CDS is currently up by 8% from 2010's average.
Interestingly, Dubai is the only place in GCC whose CDS declined the most year-to-date, mainly because of Dubai world deal, despite current uprising in the MENA region.
5-year CDS (bps) | |||||
5-Apr-11 | YTD Change | 2010 Avg. | 52-week high | 52-week low | |
Dubai | 379 | -6% | 415 | 491 | 377 |
Abu-Dhabi | 101 | 15% | 94 | 119 | 90 |
Saudi Arab | 116 | 57% | 76 | 143 | 70 |
Qatar | 102 | 23% | 88 | 120 | 80 |
Oman | 142 | -4% | 149 | 194 | 128 |
Bahrain | 306 | 72% | 186 | 359 | 167 |
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