Dubai gets last minute aid from Abu Dhabi

Abu Dhabi gave US$10bn in loan to Dubai for repaying part of the debt held by Dubai World and its property unit Nakheel. Out of this, US$4.1bn will be used to repay Nakheel's Islamic bond, or sukuk, that matures. The remainder of the funds will be used to finance Dubai World's needs up until the end of April 2010. "We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices," Sheikh Ahmed bin Saaed al-Maktoum said in a statement. "Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come," Saaed al-Maktoum said. Abu Dhabi is the largest member of the United Arab Emirates federation and a major oil exporter.
Dubai rocked world markets in late November when it requested a freeze on debt payments by Dubai World in order to restructure the conglomerate. Nakheel's bond had been seen by many as a litmus test for Dubai's ability to repay more than US$80bn of government and corporate debt. Media speculation that Nakheel's debt woes could soon be over helped boost shares in Dubai last week. In its statement, Dubai said that it will focus on addressing the concerns of Dubai World's creditors and will start discussions with creditors and contractors shortly. Separately, reports stated that the United Arab Emirates (UAE) central bank will be there to inject liquidity as needed into banks that face exposure to Dubai World