The National (Abu Dhabi) has an article titled Full Repayment Is Option For Dubai that has left me scratching my head.
Here are three quotes along with some comments in blue italics.
- “They made clear there were a number of options the Government of Dubai saw as feasible and desirable for Dubai World and repayment in full was one of them,” said a person at the talks who declined to be identified because the meetings were private. AA: That means the Government of Dubai sees other "feasible and desirable" options. Would one of those be refusal to pay anything? A haircut on principal? Conversion of the debt into season passes at Wild Wadi?
- Full repayment would be the preferred option for the creditors, represented by the British banks RBS, Standard Chartered, Lloyds and HSBC, with the regional banks Abu Dhabi Commercial Bank and Emirates NBD representing the Gulf. AA: Great minds think alike. That was AA's strategy as well when he was active in the underwriting and funding of debt. In fact, getting back one's principal (plus interest) was a key business principle in the debt markets - at least at that time.
- “We will have to see what timescale they [Dubai] are looking at as a feasible repayment period,” one banker who asked to remain anonymous said yesterday. “If they can come up with a plan to repay over a period of, say, five years, with a commitment to maintain interest payments over that period, we would have to consider that.” AA: Does this mean that if the proposed repayment were over six years, these banks would refuse to consider it? And precisely what would they do in such a case? Ask the BBA to write a letter to Lord Davies so he would have a word with Shaykh Khalifa? When AA was involved in debt restructurings, we generally began by constructing a reasonably based cashflow for the debtor. After applying some margin of safety, we could pretty much determine the required repayment tenor. Working the other way around by positing a repayment tenor without reference to reality is a bit riskier.
Posts
7 comments:
Dubai behaves as if it is doing its creditors a favour by offering to graciously repay its debt eventually, probably, conditions apply, only on Mondays in springtime between 12 and 12:17am.
Surely this goes a long way in rebuilding Dubai's reputation ?
It's unclear to me what is going on.
Perhaps instead of hubris, it's a lack of attention to or concern with detail. "Ma, ma, hu, hu" as they say in China.
The announcement of Dubai's Law 35 of 2009 wasn't particularly well done. The Qatar Government announcement of changes to its tax regime is still "ghamid" in several respects.
Also sometimes in certain cultures (including my own), there seems to be a belief that saying something makes it so. Described by one of my colleagues as the "third world belief in the magic power of the word".
Whereas in my culture [a politician / ruler] saying something means it ain't so...or it was going to be so but he was misinterpreted or something or the other.
Mother of parliaments?
Or the "lucky country"?
Neither! A hint: My country was kown as 'lucky' long before the other 'lucky' one discovered BBQ and beer.('bella gerant alii, tu felix...nube')
But in any case, my statement applied to pretty much all Western democracies. Does anyone ever believe anything an official says? Heck no. Which is the main reason why we have written laws, official gazettes etc.
I acknowledge your point that the spoken word has a much stronger tradition in the Middle East. It explains to some extent what goes on (or wrong) in Dubai with regard to government PR.
Heimat der Sachertorte und Kolschitzky.
Exactly. I thought you'd retort with 'Schumpeter' - but Sacher is less destructive!
Post a Comment