Although a Dubai World debt deal will help lift investor concerns, Dubai firms that are trying to raise capital in the future are likely to pay more and face greater scrutiny, Reuters quoted analysts as saying.
Dubai World is in the final stages of preparing a debt restructuring proposal to present to creditors after it said in November it would delay repayment on $26 billion in debt.
“It [the debt proposal] will likely make capital raising more challen-ging. Risk premiums should be higher going forward,” UBS analyst Saud Masud said.
He added that the exact impact of a deal for Dubai companies will depend on how much of a reduc-tion debtors see in the principal and the extent to which the maturities are extended.
“You will see, in the medium- to long-term, increased demand from investors for more transparency, disclosures and unfortunately, on pricing as well,” Mohieddine Kronfol, managing director at Algebra Capital said.
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