By Carolyn Cohn
Concerns intensify over debt restructuring of state-owned giant Dubai World.
The cost of insuring five-year Dubai debt against default jumped to its highest level since March on Monday as concerns intensified over the debt restructuring of state-owned conglomerate Dubai World.
Nervousness over the fate of Dubai World debt grew after Dow Jones reported it is mulling a two-part deal, including one that may repay lenders 60 percent over seven years. Dubai denied the report on Sunday.
Investors, already spooked by a lack of information on the company's plans to repay the debt, reacted with dismay to the reported proposal.
The five-year CDS rose as high as 651 basis points, above the high reached after the Dubai government announced a standstill on debt held by Dubai World in November.
Dubai World is in talks with banks on the debt delay - about $22 billion linked to its main propery units Nakheel and Limitless World - but has yet to present a formal proposal.
It staved off default on a $4.1 billion Islamic bond linked to Nakheel, after a last minute bailout from Abu Dhabi in December.
The price of Nakheel's Islamic bond maturing in January 2011 fell 3.5 points to 50, according to Reuters data.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.