By Tamara Walid and Tessa Walsh
DUBAI, Dec 8 (Reuters) – Investor confidence in Dubai took a fresh knock on Tuesday as officials dithered over a rescue for debt-laden state conglomerate Dubai World and ratings agency Moody’s slapped a downgrade on government-related debt.
“You can usually take the view that no news is good news, but in Dubai’s case it’s quite the opposite — investors need to hear some developments on Dubai World’s restructuring,” said Julian Bruce, EFG-Hermes director of institutional equity sales.
Leading lenders met Dubai World on Monday to negotiate over a $3.5 billion sukuk, the world’s largest, issued by Dubai World subsidiary Nakheel, builder of Dubai’s palm-shaped islands.
That bond is scheduled to be repayed on Dec. 14, in less than a week, but longer term, creditors also face a request for a six month standstill on $26 billion of debt.
A banker close to the discussions said Dubai World had not yet shown the creditors a proposal.