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Press Release

Several Dubai Government-Related Entities Downgraded And On Watch Negative Following
Debt Restructuring Announcement

DUBAI (Standard & Poor's) Nov. 25, 2009--Standard & Poor's Ratings Services said it
had taken rating actions on a number of Dubai-based government related entities
(GREs) and transactions (for full details see "Ratings List" below). Standard &
Poor's has downgraded DIFC Investments LLC, DP World Ltd., Jebel Ali Free Zone
(FZE), Dubai Holding Commercial Operations Group LLC (DHCOG), and Emaar Properties
PJSC. All of these entities have been placed on CreditWatch with negative
implications. The ratings on Dubai Multi Commodities Centre Authority (DMCC) were
affirmed, although they were placed on CreditWatch negative. A CreditWatch negative
placement also applies to the notes issued by Thor Asset Purchase (Cayman) Ltd.
(Thor), which are securitized by cash flows from a revolving pool of existing and
future receivables originated by Dubai Electricity and Water Authority (DEWA; not
rated).

The rating actions are the result of the announcement on Nov. 25 of the

Dubai World, a conglomerate owned by the government of Dubai, is asking its creditors for a six-month “standstill” on its obligations. Dubai World includes Nakheel, which has USD 4 bn in outstanding Islamic debt falling due next month.

The refinancing of Nakheel’s US$3.5 billion (Dh12.85bn) Sukuk will be of utmost relevance to the credit ratings Moody's has for Dubai entities. Nakheel has not the stand alone capacity to repay the Sukuk reported Paulo Vecina in The National.

Dubai’s Nakheel receives bail-out cash, but the amount is not disclosed, reported Simeon Kerr in the Financial Times; it is also said that Nakheel was restructuring some payment plans with suppliers.

Contractors say developers such as Nakheel have started to honour some – but not all – payments, after months of delay.

Emaar Economic City in Riyadh, as subsidiary of Emaar Properties Dubai, announced that it has so far earned SAR 2 bn from the sale of the first phase of residential units.

http://archive.gulfnews.com/business/Real_Estate_Property/10300746.html

Nakheel has joined Thailand's Amburaya Hotels & Resorts to transform Thailand's idyllic Koh Samui Island with the launch of a stunning integrated resort development comprising 17 luxurious private residences and a 75-key all-villa hotel.

http://archive.gulfnews.com/business/Real_Estate_Property/10300825.html

Dubai-based developer Limitless said Thursday it is reviewing a $12 billion (Dh44.04 billion) residential and commercial project in India because authorities there have not yet bought the required land. Its announcement came a day after the developer cut 7 per cent of its workforce and delayed a key contract on its $61 billion Arabian Canal project due to the global economic downturn.

http://archive.gulfnews.com/business/Real_Estate_Property/10300811.html

Soren Billing reported on 10 February in Arabianbusiness that credit default swaps for Mideast lenders have risen substantially led by Bahrain, spreads have widened by 174.2 basis points (bps) in the last three months, followed by Saudi Arabia (114.8 bps), Abu Dhabi (96.7 bps) and Qatar at (70 bps), Corporates in the region have been hit even harder. The CDS spreads on Dubai based companies range between 600 bps and 1,100 bps, which is significantly higher than on Abu Dhabi based corporations, which range between 250 bps and 400 bps. The yield on Nakheel’s Sukuk that matures on Dec. 14 this year reached 41.9 % from 27.7 % a month ago.

Dubai`s corporate bonds pricing in further economic difficulties according to Nish Popa, ING Investment Management. The yield on the 3-year Sukuk issued by Nakheel Development, soared to 32% from 5% in January 2008.

Mohammed Abbas reported on Arabian Business on 27 April that state-owned Nakheel, developer of three palm-tree shaped islands off Dubai's coast, set price guidance for the 2-year USD 1 bn Sukuk Al Ijara at 225 to 250 basis points above the Emirates Interbank Offered Rate (Eibor). The Sukuk will be denominated in Dirham. 3-month Eibor is at about 1.92 %, according to data from newswire Reuters. Date for sale is not yet set.

Dubai Islamic Bank, JPMorgan Chase & Company and Dubai-based Emirates NBD are Arrangers.

Kar Tung Quek is Nakheel Chief Financial Officer (CFO).

Source: http://www.arabianbusiness.com/517621-nakheel-sets-1bn-bond-price-guiden...