A Dubai Holding unit, which belongs to the ruler of the emirate, said on Sunday it had made about $100 million worth of scheduled distribution payments on three bonds due over the next five years.
The move by Dubai Holding Commercial Operations Group (DHCOG), the holding firm of Dubai Holding's property, business parks and hospitality units, could help allay fears that more Dubai-linked entities face debt commitments they cannot meet.
"It sends the right signal to the markets," said an analyst at an international lender, who asked not to be identified. "I have no doubt they will struggle over the next few months. But they will get over it with the support of Abu Dhabi. "I don't think Abu Dhabi will let them down." Dubai rocked global markets on November 25 when it asked for a delay in repaying $26 billion in debt linked to its Dubai World conglomerate and its property units Nakheel and Limitless World.
Arabic-language daily Al Ittihad, citing an internal report on Sunday, said the conglomerate's property and investment assets exceed $120 billion at the end of 2009, enabling it to cover its debt.
Dubai World - which has yet to publicly outline its restructuring plans and present a standstill agreement to creditors - managed to stave off a $4.1 billion default on an Islamic bond linked to property unit, Nakheel.
That repayment came thanks to a last-minute bailout by wealthier neighbour Abu Dhabi on December 14. With the Nakheel bond out of the way, Dubai Holding was next in the sights of jittery investors, concerned about the group's debt position.
The company is made up of DHCOG, Dubai International Capital and Dubai Group, which own foreign assets including stakes in the HSBC, Madame Tussauds and Travelodge.
Dubai Holding has a $1.14 billion loan maturing August 2011, but more pressing is Dubai International Capital's $1.25 billion loan which matures in June 2010. In a statement to Nasdaq Dubai, DHCOG said it had made the periodic distributions which come due on February 1, 2010.
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