DP World Ltd. and Jebel Ali Freezone will not be included in the restructuring of their parent firm, Dubai World, officials said on Thursday.

After credit rating agencies Standard & Poor’s and Moody’s
Investors Service downgraded some Dubai government-run companies
following the announcement of the restructuring plan.

Dubai World, with debts of $59 billion, surprised markets on Wednesday
by asking to delay payment of its obligations until May 30, 2010. It
sought from its creditors a “standstill agreement” that would extend
the maturities of its debts, including the $3.52 billion Islamic bond
of property subsidiary Nakheel PJSC, builder of Dubai’s emblematic palm
tree-shaped islands.

DP World, in a filing at Nasdaq Dubai, said it would not be part of the
restructuring process for Dubai World. A person knowledgeable about the
restructuring said that Jebel Ali Freezone, orJafza, also would not be
included in the restructuring.

Standard & Poor’s, acting late last night Dubai time, cut its debt
rating for DIFC Investments LLC by four notches to BBB-minus, just one
notch above junk grade. It lowered DP World Ltd. and? Jebel Ali Free
Zone by two notches to BBB-minus, and cut Dubai Holding Commercial
Operations Group LLC by two notches to BBB-plus.? Emaar Properties PJSC
was downgraded by two notches to BBB-minus.

Dubai World’s intention to seek a delay in its repayments sent
credit-default swaps rising across the Gulf region. On Thursday,
five-year credit-default swaps were? trading at 550 to 600 basis points
and are likely to stay high, said Luis Eduardo Costa, a London-based
emerging market debt strategist at Commerzbank.

Source: Khaleej Times

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