Creditors offload Dubai World
Creditors of the Dubai World debt due in June will try to offload their exposure by offering their bonds for sale at below-par prices. Whether it pays off will depend on their creditor agreements and the future liquidity of the bonds.
With a standstill agreed until April, creditors will be considering their position and deciding if it's worth entering a lengthy restructuring and tying up money, or getting out now and realising a loss.
The bonds are expected to be offered at 70% of their face value, but opportunistic investors will bid lower, then hope to realise more once a restructuring is finalised or a bailout payment made.
Reports suggest that at the moment smaller international banks are offering the loans for sale, rather than local creditors or the large investment banks. This could be due to their position in the intercreditor structure. It could also...