Hmm, it seems that Dubai may be having trouble with their debt load.
"Obviously, the debt restructuring has caught investors very much by surprise," said UBS analyst Saud Masud, who believes the UAE and Dubai governments wouldn't risk so much damage to their financial reputation unless it was essential to a larger plan of achieving long-term stability.
This makes sense so instead of just writing a big check underwritten with their oil wealth they are going to let the market decide what happens. Seems like a good plan and they should have a sound balance sheet once the bad debt gets flushed out of the system.
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