London: The United Arab Emirate (UAE) has total debt amounting to USD 184 billion at the end of 2009, according to estimates by Bank of America-Merrill Lynch, which said the region faces a heavy redemption schedule until 2013.
Dubai's shock announcement this week that it is seeking to suspend payments on debt of its state-owned conglomerate Dubai World and property subsidiary Nakheel has roiled global markets, raising fears that the emirate which funded a spectacular building boom on a mountain of debt could default.
BofA-Merrill Lynch said in a report that the restructuring undertaken by Dubai would be a serious blow to the Gulf region's economic recovery prospects, adding that the scale of the region's debt was now the issue.
"The lack of official debt data may add up to uncertainty and cause higher risk premiums," it said.
Of the USD 184 billion UAE debt, Dubai holds USD 88 billion while Abu Dhabi accounts for USD 90 billion. BofA-Merrill Lynch said the debt servicing cost will be higher than these estimates as their numbers only include the principal payments.
The bank said Dubai faces almost USD 50 billion of debt amortization in the next three years: USD 12 billion in 2010, USD 19 billion in 2011 and USD 18 billion in 2012.
"We estimate the total debt for Dubai World as $26.5 billion, 80 percent of which needs to be paid back in the next three years," added BofA-Merrill.
Bureau Report
First Published: Saturday, November 28, 2009, 00:27