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Gulf debt insurance costs surge; Dubai 5-yr CDS up 129 bps
November 27, 2009 / 9:53 AM / 8 years ago

Gulf debt insurance costs surge; Dubai 5-yr CDS up 129 bps

LONDON, Nov 27 (Reuters) - Credit default swaps (CDS) for Dubai blew out more than 100 basis points on Friday while the cost of insuring debt held by state-owned Dubai Ports World DPW.DI rose over 200 bps, CDS monitor CMA Datavision said.

Dubai five-year CDS were quoted at 670.1 basis points versus a Thursday close of 541.2 bps and compared with around 300 bps just before the Wednesday announcement by the emirate that it would seek to restructure debt held by two leading state-run corporates.

This means it now costs $670,000 to insure $10 million in Dubai debt for a period of five years. This is higher than the cost of insuring Iceland and Latvian sovereign debt.

Dubai Ports World (DPW) five-year CDS rose to 818.5 bps from a Thursday close of 608.6 bps, CMA said. The government has said debt of DPW will be unaffected by the debt restructuring of its parent company Dubai World.

Debt insurance costs for other Gulf sovereigns also continued to rise, with Abu Dhabi CDS now quoted at 184.2 bps, a rise of 24 bps from the previous session and Bahrain was at 230 bps compared with 217.1 bps.

(Reporting by Sujata Rao)

sujata.rao@thomsonreuters.com; +44 207 542 6176; Reuters Messaging: sujata.rao.reuters.com@reuters.net

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