Looks like we have another bail out, middle east style.
Bloomberg is reporting, the U.A.E. central bank is offering loans at 50 basis points in a special facility.
The United Arab Emirates’ central bank said it “stands behind” the country’s local and foreign banks, which face losses from Dubai World’s possible default, and offered them access to more money under a new facility.
Banks will be able to use a special facility tied to their current accounts that can be accessed at a cost of 50 basis points above the three-month local benchmark interest rate, the Abu Dhabi-based regulator said in an e-mailed statement today.
CDSes on Dubai went to 647 basis points since the state owned Dubai World said they wish to delay repayment.
The Financial Times on bonds and it's vague:
Dubai World is preparing to persuade bondholders to roll over the maturity while the government plans a charm offensive to repair damage caused by a standstill call that followed months of officials downplaying concerns over Dubai’s ability to meet obligations on its $80bn debt pile.
Now this is amusing, unlike Hank Paulson and Ben Bernanke claiming the sky is falling so Congress should write a blank check, see what Abu Dhabi is saying:
UAE officials have also said that while they would support all members of the seven-emirate federation, Abu Dhabi would not simply write Dubai a blank cheque.
Middle East stock markets open tomorrow and the Dubai World announcement came during an Islamic holiday so markets were closed the entire time.