* Dubai rolls over $20 bln crisis debt from AD govt, UAE
* Agreement extends maturity for 5 yrs at 1 pct p.a.
* Roll-over expected by market
DUBAI, March 16 Abu Dhabi and the central bank
of the United Arab Emirates have agreed to refinance $20 billion
of debt that was extended to the Dubai government as emergency
aid during its financial crisis and comes due this year, the
state news agency said on Sunday.
The debt is being rolled over for five years at a 1 percent
annual interest rate, WAM said in an official statement.
The roll-over covers a $10 billion, five-year loan which was
offered to Dubai by the Abu Dhabi government through two
state-owned banks, and $10 billion of five-year bonds which
Dubai issued to the UAE central bank.
The agreement, which had been expected by financial markets,
will enable Dubai to continue spending heavily to develop itself
as a regional centre for finance, trade and tourism.
Dubai, one of seven emirates in the UAE, obtained the aid in
2009 after the global credit crisis caused its real estate
market to crash, threatening to force some of its state-linked
firms to default on billions of dollars of debt.
The neighbouring emirate of Abu Dhabi, which is the capital
of the UAE and has vast oil wealth, stepped in to bail Dubai
out. Dubai is now recovering strongly, with residential property
prices up over 20 percent last year and its stock market
rallying about 140 percent since the end of 2012.
This month's roll-over deal "is part of the signatories'
attempts to reinforce the competitiveness of the Emirati economy
regionally and internationally," WAM said. "It also reflects the
positive developments that the local economy of the emirate of
Dubai has seen in recent years."
Dubai's $10 billion of debt to the UAE central bank had been
due to mature this month; in February, Reuters quoted sources
familiar with the matter as saying an agreement to roll over
that amount had been reached.
The other $10 billion of aid, extended through National Bank
of Abu Dhabi and Abu Dhabi's Al Hilal Bank, was due to
mature in November this year.
Dubai appears to be getting considerably more attractive
terms in the roll-over than it obtained during the crisis in
2009; the original bonds issued to the central bank carried a 4
Some of Dubai's biggest government-related entities (GREs)
are working through debt restructurings launched after the
crisis, and will have to sell assets to meet repayments in the
next few years.
The International Monetary Fund estimated in January that
Dubai and its GREs faced about $78 billion of maturing debt
between 2014 and 2017; this month's agreement takes care of more
than a quarter of it.