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Dubai asks for delay over debt

DUBAI WORLD, the owner of P&amp;O, triggered fury last night after it called for a moratorium on its debt repayments. The announcement sent the cost of insuring Dubai&rsquo;s sovereign debt against default soaring above Icelandic levels. The emirate was last night judged the sixth riskiest country in the world by the credit markets.<br /><br />The news from the firm, which has $59bn (&pound;34bn) in liabilities, also prompted Moody&rsquo;s and Standard &amp; Poor&rsquo;s to cut the ratings on several other Dubai state companies, saying they may judge the plan a default.<br /><br />Dubai World &ndash; the Dubai government&rsquo;s main investment company &ndash; and its Nakheel property unit called in Deloitte to advise it on restructuring and asked creditors for a six month moratorium on repayments. Debts maturing before the end of the year include $3.5bn of Islamic bonds due on 14 December. <br /><br />Dubai&rsquo;s ministry of finance&nbsp; yesterday also raised $5bn in bonds from Abu Dhabi. The tranche was fully subscribed equally by National Bank of Abu Dhabi and Al Hilal Bank. The Dubai government has $80bn in debt. <br /><br />RBS?analyst Okan?Akin said: &ldquo;The timing could not have been worse. If Dubai had come with a similar proposal six months ago it would not have been so bad but given it was making supportive comments all along, announcing a restructuring just three weeks before maturity will hurt a lot of investors.&rdquo;