Dubai govt. direct debt registers significant drop

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Aerial view of Dubai. Photo - AP

A Dubai government’s bond prospectus suggested its direct debt dipped 1.6% at the end of March from May last year to AED113.6bn ($31bn).

Outstanding government debt, excluding that owed by state-run companies and other liabilities, was 38% of its 2010 nominal gross domestic product (GDP) of AED300.8bn, figures in the government’s bond prospectus obtained by Bloomberg reported.

The Dubai government’s previous prospectus showed an outstanding debt of AED115.4bn ($31.42bn) on 20 May 2011.

According to the prospectus, debt of the Investment Corp of Dubai, one of the government’s main holding companies, also fell 42% over the period to AED12.7bn ($3.46bn). The figures exclude debt owed by its subsidiaries. The investment company repaid loans worth $4bn in August, the prospectus revealed.

The Bloomberg report added that the government is yet to draw about $600m from the $20bn it raised for its Dubai Financial Support Fund in 2009 from the sale of bonds to the central bank, the Abu Dhabi government and its banks.

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