“On the assumption there are no strings attached, this is good news,” said Tristan Cooper, vice president and senior analyst at credit-rating firm Moody’s Investors Service Inc. in Dubai. “On the other hand, this is a reflection of the serious challenges Dubai faces,” he continued. “The fact that they’ve had to go to the federal government is really illustrative of their own internal problems.”
The announcement was made in a late-night statement at the start of the week. The money will be raised by selling $20 billion in government bonds to “secure the necessary funding for Dubai to meet its financial obligations and continue its development program.” The first $10 billion were all bought by the UAE Central Bank, which is based in the capital, Abu Dhabi. There has been no word on buyers for the rest.
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