Dubai default swaps jump to highest since debt delay
Sunday, 14 February 2010
ABU DHABI, Feb 13 (Bloomberg): The cost to protect against a default by Dubai surged to the highest since state-controlled Dubai World delayed debt repayments in November, as Greece's financial crisis reignited concern riskier emerging-market debt might not be repaid.
Credit-default swaps linked to Dubai debt jumped the most in two months, rising 53 basis points to 638 basis points at 9:15 a.m. in New York, according to CMA Datavision. The contracts are at the highest since Nov. 27. Dubai's Islamic bond due 2014 fell to 87.125 cents on the dollar from 89 cents, the lowest since the debt was sold in October, according to Royal Bank of Scotland Group Plc prices.
"Dubai is definitely the most disliked paper in the region and is doomed to remain so because of the lack of clear transparency about Nakheel," Dorothee Gasser-Chateauvieux, senior emerging-market economist at ING Groep NV in London, said in an interview.
Credit-default swaps linked to Dubai debt jumped the most in two months, rising 53 basis points to 638 basis points at 9:15 a.m. in New York, according to CMA Datavision. The contracts are at the highest since Nov. 27. Dubai's Islamic bond due 2014 fell to 87.125 cents on the dollar from 89 cents, the lowest since the debt was sold in October, according to Royal Bank of Scotland Group Plc prices.
"Dubai is definitely the most disliked paper in the region and is doomed to remain so because of the lack of clear transparency about Nakheel," Dorothee Gasser-Chateauvieux, senior emerging-market economist at ING Groep NV in London, said in an interview.