DUBAI Dubai's $10 billion aid from Abu Dhabi in December, which helped the emirate avoid default on a state-linked developer's bond, included $5 billion previously lent by two Abu Dhabi banks, a Dubai government spokeswoman said on Monday.
The spokeswoman said the $10 billion aid included $5 billion promised on November 25 by Al Hilal Bank and National Bank of Abu Dhabi NBAD.AD.
On the same day, Dubai rocked global markets by saying it would request a standstill on $26 billion in debt linked to flagship conglomerate, Dubai World DBWLD.UL.
Dubai raised $5 billion in November as part of a $20 billion bond programme announced early last year. The UAE central bank signed up for $10 billion of that in February.
It had been unclear whether Abu Dhabi's $10 billion lifeline on December 14 -- which enabled Dubai World to repay a $4.1 billion Islamic bond, or sukuk by developer Nakheel -- was entirely new money or included the bond to Abu Dhabi-controlled banks.
The Dubai statement on Dec 14 had said the government of Abu Dhabi and the UAE central bank had agreed to provide the support.
"Specifically, the Government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World," the statement said.
Dubai had drawn down $1 billion of the banks' $5 billion funding, with the rest yet to come.
"That doesn't surprise me because the ultimate beneficiary for both those entities is the Abu Dhabi government," said Khuram Maqsood, managing director of Emirates Capital.
"Where the money comes from doesn't matter as much as the fact that it came from the Abu Dhabi government and the Abu Dhabi government directed the disbursement."
Dubai has drawn down $1 billion of the banks' funds, provided under a five-year bond priced at 4 percent, the spokeswoman said.
Dubai World is in the midst of talks with its creditors to finalize a formal standstill agreement that would last for six months, during which the conglomerate will further restructure its debt pile.
On Monday, the Financial Times said some creditors to the conglomerate are seeking to offload loans to reduce their exposure to the conglomerate.