UAE. Government-controlled companies in Dubai owe about US$70 billion in foreign-currency loans and bonds, making the emirate the biggest borrower in the UAE, according to Fitch Ratings.
Fitch’s estimates are higher than those of Moody’s Investors Service, which said last month state-run firms in Dubai owe at least US$47 billion, more than the Emirate’s gross domestic product.
The global economic slowdown may hit Dubai harder than the other six Emirates - Abu Dhabi, Ajman, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain – because it borrowed more to finance the transformation from a Gulf trading post to a financial and tourist hub and has only 4 billion barrels of oil reserves.
“Dubai is the most indebted, with approaching US$70 billion of identified foreign-currency loans and bonds outstanding,” London-based Fitch analysts Richard Fox and Charles Seville wrote in a report released on Friday on the UAE’s total external debt. “The global credit crunch has focused attention on the ability to refinance outstanding debt.”
The Emirates publish no official figures on their external debts. Dubai-based companies had about US$11 billion of loans maturing in the final quarter of 2008, some of which has already matured or been refinanced, Fitch said.
Abu Dhabi-based firms owed about US$50 billion in foreign currency loans and bonds as of September, Fitch estimated.
The UAE’s gross external debt was US$170 billion as of June, up from US$145 billion at the end of 2007. Banks owed about 60% of the UAE’s total external debt, according to Fitch.
Approximately 20% of UAE bank external liabilities represent non resident deposits, reflecting the country’s increasing role as a regional and international financial and business centre.
The UAE’s top four banks by assets, accounting for over half domestic banks’ assets, are majority state-owned, according to Fitch.
Sunday, November 2, 2008
Dubai firms owe US$70 billion in foreign loans, bonds, says Fitch
