DUBAI, (Reuters) – A Dubai Holding unit, which belongs to the ruler of the emirate, said on Sunday it had made about $100 million worth of scheduled distribution payments on three bonds due over the next five years.
The move by Dubai Holding Commercial Operations Group (DHCOG), the holding firm of Dubai Holding’s property, business parks and hospitality units, could allay fears that more Dubai-linked entities face debt commitments they cannot meet.
“It sends the right signal to the markets,” said an analyst at an international lender, who asked not to be identified.
“I have no doubt they will struggle over the next few months. But they will get over it with the support of Abu Dhabi.
“I don’t think Abu Dhabi will let them down.” Dubai rocked global markets on Nov. 25 when it unveiled plans to request a standstill on $26 billion in debt linked to its Dubai World conglomerate.
Dubai World — which has yet to publicly outline its restructuring plans and present a standstill agreement to creditors — managed to stave off a $4.1 billion default on an Islamic bond linked to property unit, Nakheel.
That repayment came thanks to a last-minute bailout by wealthier neighbour Abu Dhabi on Dec. 14. Dubai Holding was next in the sights of jittery investors, concerned about the group’s debt position.
The company is made up of DCHOG, Dubai International Capital and Dubai Group, which own foreign assets including stakes in the London Stock Exchange, Madame Tussauds and Travelodge.
In a statement to Nasdaq Dubai, DHCOG said it had made the periodic distributions which come due on Feb. 1, 2010.
The company said the three payments consist of: a 35.63 million euro distribution on a 750 million euro note due Jan. 30, 2014; 30 million pounds on a 500 million pound note due Feb. 1, 2017 and $828,650 on a $500 million note due Feb. 1, 2010.