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Tuesday, December 8, 2009


Creditors plan to pressure Dubai World to sell assets
Creditors of Dubai World said they plan to sue the company to force it to sell assets. Activist hedge fund QVT is spearheading the move, which would ask the court to force the sale of not only the waterfront real estate that guarantees Dubai World's debt but also ports and foreign real estate assets that are owned by the company's investment division, Istithmar. Dubai World is restructuring $26 billion in debt, but about 40% of foreign creditors said they might reject the terms of the restructuring. The New York Times (07 Dec.)

Cost of debt restructurings in Dubai might soar, analysts say:
Morgan Stanley analysts said the debt restructuring of state companies in Dubai, United Arab Emirates, might reach $46.7 billion. Dubai Holding, Dubai Sukuk Center, Dubai Holding Commercial Operations Group and Borse Dubai might need to restructure their debt alongside Dubai World, the analysts said. "We believe that a haircut on the external debt at risk in the area of 40% to 50% is necessary to have a notable long-term favorable impact on public debt dynamics," the analysts wrote in a report. Bloomberg (08 Dec.)

Next crisis to be in commercial real estate, experts say
A crisis looms for the commercial real estate market in 2010, then for the government-debt market, particularly in the U.S., investment managers said. "I think the next shoe to drop, which will be the world's biggest shoe, is the continued decline of the dollar and ultimately the breaking of the U.S. government market, which will set the other markets on another terrible path," said Steve Shenfeld, president of MidOcean Credit Partners. The danger of default on commercial real estate also is a major threat, Shenfeld said. Reuters (07 Dec.)

S&P warns about sovereign-debt ratings of Greece, Portugal
Standard & Poor's put the single-A-minus rating on Greece's sovereign debt on negative credit watch. In late October, Moody's Investors Service put Greece's currency ratings on review for a possible downgrade. S&P also put Portugal's sovereign-credit rating on "negative" outlook, citing deterioration in public finances. The Wall Street Journal (08 Dec.)

Most investors see dark pools as "problematic," survey finds
A survey by the policy arm of the CFA Institute found that 70% of investors said dark pools are at least somewhat "problematic" for market volatility as well as price discovery. Nearly 60% of respondents said the opaque systems also are problematic for market liquidity. The report was done to see how fragmentation of European markets has affected price formation, transparency and costs. "If it appears that there is a problem, if we find out there are distortions that might have an impact on investor protection, then we might have to step in," said Eddy Wymeersch, chairman of the Committee of European Securities Regulators. Financial Times (tiered subscription model) (08 Dec.)

U.S. companies plan to hire next quarter, survey finds
U.S. companies are set to begin hiring again next quarter, according to a survey by Manpower. The provider of temporary workers said its index of employment for January through March rose to 6 from negative 2 for this quarter. "Companies are seeing some demand so they don't want to let anyone else go," said Jeffrey Joerres, CEO of Manpower. "They anticipate a slow but positive 2010." Bloomberg (08 Dec.)

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