[ForexNews]

Dubai World put out a statement last night with some details on the debt subject to a restructuring. The company has confirmed that the debt of only three entities will be restructured - Dubai World holding company, Nakheel and Limitless (the international property development arm), which together hold a total of $26bn of debt. DP World, Jafza, P&O Ferries, Istithmar and Infinity are not being restructured. Dubai World intends to conduct the restructuring process on an expedited basis and has asked Nakheel's sukuk holders to appoint a representative to commence discussions.

Global risky assets have mostly shaken off the shock of the Dubai news from last week, consistent with view that there are limited risks to the global financial system from this event. In UAE markets, equity markets have so far clearly suffered most with Dubai and Abu Dhabi indices down about 13% from last Monday - in contrast to the wider global equity recovery. Sovereign CDS fared better - yesterday's rally in global credit market left spreads for most EMEA sovereigns only marginally wider than early last week before the Dubai events unfolded. In local rates, the central bank's supportive measures are clearly helping assuage concerns and EIBOR fixings have stated rock steady. In the IRS market, the spread over US Swaps continues to widen however. While much of this has been led by the US curve, it likely also reflects some residual risk/liquidity premia being priced in. Meanwhile, AED swap points shifted left yesterday and more could materialise in the near term if local banks use the FX swap/CCS market more actively to obtain FX funding. In other GCC markets the FX forward points (USD/KWD and USD/SAR) are broadly stable and interbank rates (KWD) are unchanged from before the holiday.