Dubai, United Arab Emirates David Rosenberg (The Medi – More than two years after one of its showcase companies announced a “standstill” on its loan repayments, signaling the end of a real estate-fueled boom, a mountain of debt continues to cast a long shadow over Dubai’s economy.

Moody’s Investors Service brought the extent of the problem home in a report released Tuesday that sent local share prices falling. The credit-rating company estimated that even after two years of restructuring, refinancing and help from the neighboring emirate of Abu Dhabi, Dubai’s government and its state-owned companies owe some $101.5 billion.

In fact, total debt may be higher because of the difficultly of getting data on the bank debt of closely held companies, Moody’s said.

“Although we believe a substantial portion of this debt has been captured in our analysis, the total amount of debt is likely to be higher than the amount we have identified. In particular, we note that off-balance-sheet debt in special-purpose vehicles is difficult to estimate and capture,” David Staples, Moody’s managing for corporate finance, said in the report.

While the biggest repayment hump doesn’t arrive until 2014, Dubai Inc., as the network of state-owned entities is popularly known, must repay some $13.8 billion in bank and bond debt from the fourth quarter of 2011 through the end of 2012. Another $11.2 billion is being restructured. Of that, Staples pointed to some $3.8 billion owed by three state-linked entities that looks especially problematic.

With little of the oil resources other Gulf countries enjoy, Dubai transformed itself into a glittering real estate, finance and tourism hub in the space of a few years with borrowed money. But when the global financial crisis hit in 2008, Dubai’s borrowers found their cash-flows as well as access to new loans constrained. In November 2009, Dubai World, a holding company whose interests span from ports to luxury real estate, set off a debt crisis that drags on till today by announcing it wanted to delay its repayments.

The pint-size emirate has struggled to emerge from under its debt pile, which exceeds its 2010 gross domestic product of about $80 billion by a wide margin. But its efforts have been undermined by a huge overhang of unsold real estate and declining house prices. The International Monetary Fund expects economic growth to pick up to 2.8 percent this year and to 3.2 percent in 2012, but those rates pale in comparison to the 8 percent annual rate it chalked up in the boom years.

Nakheel, a developer that was forced to erase some $21 billion from the value of its real estate assets, reported a first-half net profit on Monday, citing “a relatively more stable real estate market in Dubai.” Nakheel was bailed out to the tune of $16 billion by Dubai, which is now owned by the government, but it owes another $4.8 billion, Moody’s estimates.

Dubai saw 1,603 real estate deals in the first 10 months of the year, according to Dubai Land Department. That was up from 2009, when the market hit rock bottom, but in only a fraction of the 5,363 during the same period in 2008 before the crisis hit. While home prices have stabilized, an enormous overhang of properties coming onto the market is likely to send them down again, say analysts.

Nevertheless, Daniel Broby, chief investment officer of the London-based Silk Invest, said he isn’t concerned about Dubai Inc.’s near-term outlook. He said the repayments coming due in 2012 could probably be rolled over, with a good prospect that any shortfall might be covered by Abu Dhabi.

“It’s a lot of money, but it’s not a lot when you think of challenges ahead. I don’t think it’s too much of a hurdle,” Broby told The Media Line. “Certainly 2014 looks like a real hurdle they have to get over.”

Moody’s suggested in its report on Tuesday that the emirate has exacerbated its debt hangover by failing to reduce it by selling assets. Instead, the government has pursued a strategy of repaying bondholders in full while negotiating loan extensions with banks. As a result, its repayment bills remain substantial and some companies – Dubai Holding Commercial Operations Group, Jebel Ali Free Zone and DIFC Investments LLC by Moody’s estimate – face “execution risk” in trying to meet their obligations.

On Monday The Financial Times reported that Dubai officials are weighing the prospect of restructuring some bonds next year to meet the next round of debt repayments. While the British newspaper said the emirate is also pursuing other options, including raising $2 billion from liquid local banks, the news combined with the Moody’s report gave the shivers to investors.

Shares on the Dubai Financial Market fell the most in five weeks on Tuesday, with the DFM General Index down 1.2 percent. Emaar Properties PJSC, the developer of the world’s tallest skyscraper, slumped 3.6 percent, Dubai Financial Market by 2.1 percent, and Drake and Scull by 1.7 percent.

The Financial Times quoted an unnamed official as saying that government funds might buy the distressed assets from state-related entities at higher-than-market valuations to help them generate cash. The government may make use a law that allows borrowers to restructure their bonds if they win backing from two-thirds of the holders

The Moody’s report also heightened investors’ concerns by suggesting that the government would only back less than half the $68.6 billion of Dubai state-owned corporate debt. Staples and his team divided the debt pile into three categories, including one of companies that are unlikely to need any support and companies Moody’s believes Dubai’s government has deemed “strategic” and are likely to get assistance.

Among the “non-strategic” borrowers are companies like Dubai World, Emaar Properties and Nakheel, which have interests overseas or in speculative real estate projects. The report estimated their outstanding debt at $34.8 billion.

View full post on All Stories

New York, NY, United States (AHN) – Mortgage rates were down slightly this past week, approaching, but not quite hitting, the lowest mortgage rates on record.

Adjustable-rate mortgages (ARMs), did reach new record lows. The initial interest rate on a five-year Treasury-indexed ARM dropped to 2.91 percent, Freddie Mac reported. That was lower than last week’s 2.97 percent, and it breaks the previous record low of 2.96 percent for five-year ARMs, set during the week of Oct. 6.

Average rates on a 30-year fixed rate mortgage dipped to 3.98 percent, down from 4 percent. The average rate for the 15-year fixed home loan slipped to 3.30 percent, down from 3.31. Both are just a hair–0.04 percentage points–above their respective all-time lows, according to Freddie Mac, also set on Oct. 6.

Mortgage rates have shown little change over the past four weeks. Loan demand has been lackluster and refinancing dropped an average of 1.39 percent over the previous four weeks, the Mortgage Bankers Association reported.

View full post on All Stories

Cairo, Egypt (TML) – Egypt’s decision to reject loans from the International Monetary Fund (IMF) and World Bank may save the government unwelcome political controversy at home, but it risks undermining the country’s already severely strained economy, economists warned.

The terms of the IMF financing as well as the government’s plan to substitute it with lower spending and domestic borrowing remain murky. But economists said that without IMF help Egypt would almost certainly be saddled with higher debt costs and inflation. Furthermore, private business will now have a harder time raising capital for its own investment needs.

Less than three weeks ago, Cairo gratefully accepted an IMF offer to make $3 billion available at a very low interest rate of 1.5%. Egypt was also discussing a $2.2 billion two-year loan with the World Bank. But on Saturday, Finance Minister Samir Radwan said the government had changed its mind. Instead, it would cut its budget deficit for next year and borrow money at home.

“We do not need to go at this stage to the Bank and the Fund,” Radwan told the Reuters news agency.

The loans and aid are part of a wide-ranging effort by the U.S and other Western powers to help Egypt and the other Arab Spring economies make an orderly transition to democratic rule. But the assistance, particularly from the IMF and World Bank, has aroused the suspicions of many Egyptians, who fear that the aid will come with strings attached.

“There was a lot of excitement,” Magda Kandil, executive director of the Egyptian Centre for Economic Studies, told The Media Line. “They tried to appeal to these concerns saying that it was gesture of goodwill without any commitments to anything problematic.”

At the Group of Eight summit last month, leaders said that Egypt and Tunisia could receive as much as $20 billion total in loans from institutions like the World Bank

The U.S. has also promised a $1 billion debt-for-investment swap, about which few details have been given, and an additional US$1 billion in loans. Arab states, such as Qatar and Saudi Arabia, also offered support.

Egypt isn’t rejecting all of this largesse, but for now, Radwan said, instead of IMF funding Egypt would cut government spending in the next fiscal year. The original 2011/12 budget, approved June 1, contained a whopping 25% increase in spending to create jobs and subsidies for the poor. But last week just before it turned down the IMF loan, the government revised its plans, trimming 36 billion Egyptian pounds ($6 billion) from its deficit to 134 billion pounds, the equivalent of 8.6% of GDP.

In addition, the government will increase borrowing in the domestic market, Radwan said.

The problem is that borrowing in the domestic market means that Egyptian businesses will have to compete harder to get the investment capital they need to expand production and hire more people, Kandil said. She said it also threatens to add to inflationary pressures, creating a burden to Egypt’s hard-pressed poor. Government spending cuts may further undermine the economy.

With a gross domestic product forecast by the IMF of 1% this year as inflation reaches 11.5%, Egypt can’t afford to exacerbate either trend. Furthermore, another 700,000 Egyptians are entering the job market every year, further swelling the ranks of the unemployed.

While the mass protests that brought down President Hosni Mubarak are over, Egypt continues to suffer strikes, disorder and arrests of allegedly corrupt businessmen that have kept tourists and investors away.

The slowdown threatens to exacerbate the poverty and unemployment that helped spur the unrest to begin with, undermining political stability. Yet higher global prices for food and energy have forced the government to spend more on subsidies, diverting resources away from productive investment.

Egypt is already carrying about $35 billion in foreign debt and another $155 billion in internal debt, according to the Central Bank. Egyptian banks enjoy considerable liquidity that would enable them to provide more loans. But domestic borrowing will cost more than borrowing from the IMF, which will mean higher repayments for the government in the future.

“It may satisfy the financing needs of the government, but it will be problematic because you are financing at a higher cost and therefore burdening the government with future debt costs,” Kandil said.

The IMF usually conditions help on governments cutting their budgets, laying off civil servants and trimming or eliminating subsidies, earning the wrath of politicians and ordinary people targeted by the austerity measures. But the IMF’s June 5 announcement of the $3 billion in standby credit didn’t contain any explicit conditions and included the IMF view that “immediate implementation of such reforms is not feasible.”

Nevertheless, the deal did spark concerns in Egypt.

“I believe that this country’s future lies not with the same highly paid, unelected, unaccountable bureaucrats of the IMF, nor with their sacred indicators of budget deficits and market economics. Our future lies with a new home-grown economics that caters for the majority of Egyptians,” Wael Khalil, a socialist activist and blogger at Waelk.net, wrote in British daily The Guardian.

Fayza Abul-Naga, Egypt’s minister of international cooperation, felt compelled to answer critics of the deal by saying that Egypt wouldn’t “kneel” to dictations of the World Bank or the IMF. Kandil said it was possible that Cairo learned after agreeing to the IMF terms that there were indeed conditions attached that if found unacceptable.

View full post on All Stories

1. Restricted Use: Completely stop using your credit cards. Keep them in a safe place in your home. Pledge to use them ONLY in emergencies. For instance, when you’re going abroad or leaving your place for vacation.

1. Automatic Payments: You can make such arrangements where an amount (5, 10 or 20 dollars) will be automatically deducted from your bank account and will go toward your credit card balance. By doing this you will automatically spend less as you’ll be having less money. In addition, your debt will also be taken care of.

1. Extra Repayments: Try to pay even more than the minimum monthly payments. It’ll certainly make a big difference to your debt. Put a container in your wardrobe and try to keep there the remaining coins in your wallet after the day’s journey.

1. Live Frugally: There are many a ways in your daily life by which you can save a lot just by using your wisdom. For example you can save a lot on attractive deals, on grocery, on phone bills, on energy and also on entertainment costs.

1. Banking Habits: Try to visit your bank once a week and put the left over money that you’ve saved in any container or in any piggy bank in your account. If you deposit the money in your bank account you’ll certainly get the interest. But leaving it only in your house doesn’t make any sense.

Thus, these are the steps you can take to pay down your credit card debt with utmost ease. Further, by following these steps you can also get rid of paying monthly payments toward any debt settlement company.

Why no credit check personal loans are an innocent way in order to derive swift money! By performing its entire features you can understand. These loans arrange funds without the demand of checking credit history and pledging collateral. You can fetch the amount ranges from £1,000 to £25,000 for the flexible repayment period of 1-10 years. The rate of interest is a bit higher in comparison of other loans but here you are suggested before availing these loans that you should compare the various lenders’ loan quotes and you can find one of them suitable top your demand as lower price.

Similar to other loans criterions, no credit check payday loans also have some major criterions that are like: the applicant needs to be 18 years of age, be citizen of UK, be permanent employee or have an earning source of £1000 per month and have a current bank account number. These criterions enable the applicant to go for online mode since in online application such pre-requisites are required. If the application is filled out in right way then there is no need to waste your precious time for the approval while the amount will be transferred into your bank account within the least span of time on the same day.

.

.

It is easy to borrow cash with loans for bad debt scheme as these types of loans are free from all types of hectic and fussy formalities. In order to have the approval you don’t need to fax any paper, no need to carry load of huge documents. All the formalities will be done through internet. To get the cash you don’t need to own a home or car. You will get funds on the basis of your paycheck. So to ensure cash with this scheme you must have a paycheck of above £1000.

These loans are for short term and you can borrow £100-£1500 without any collateral. All you need to do is fulfill some basic conditions of lenders. To meet these conditions you must have an age of above 18 years, nationality of UK, a stable job and a valid checking bank account. The best part about this scheme is that there is no restriction on the usage of money. You can pay your pending bills, can plan a holiday or party, can renovate your home or car etc.

As these loans are associated with high risk, lenders charge interest at higher rates. So you must compare the loan quotes of various lenders before dealing with any company. Visit the website of as many lenders as you can do and choose the right one according to your financial situation and needs. So, whenever you need cash just apply for this scheme and get rid of all your financial problems.

Regardless of what the grounds, the easiest and fastest approach to obtain necessary funds is by means of a Payday Loan. Now this is furthermore identified as a quick payday loan, a cash advance loan, a quick cash loan, and numerous additional titles. This is certainly the quickest and simplest style of loan to acquire, where you can normally receive your funds in as fast as just a small amount of hours instead of holding out for a number of days or even weeks for a financial institution, credit union, or lender to move by way of their analysis approach.

But this isn’t going to indicate that payday loans are devoid of down sides, and for the sake of being whole, we at the same time have to peek at those, given that those related shortcomings may possibly over-shadow the positive aspects of getting money quickly for receiving the cash you need to have.

There are many companies out there that provide a payday loan and it certainly will pay to check around. The interest levels may occasionally be significantly different from one provider to another, and there is no logicreason in paying a lot more in interest than you need to.

What happens with this cash advance loan is that you contact one of these businesses or phone them on the phone to display your wish in receiving one of these types of loans. What you will probably need is quite straightforward — merely a form of id for example a drivers license and a couple paycheck statements from your current job. Please note that for the majority of agencies, you have to have been employed by your employer for at least approximately three months. That is it!

In addition to having low requirements to obtain your money, another extra advantage is that these types of businesses seldom conduct credit assessments on you. That would mean that if you have bad credit, that won’t matter to them and you will not likely be rejected because of a bad credit rating.

At this moment on the side of the drawbacks, you must be aware that this kind of loan is identified as a payday loan for the reason that it is commonly due in full on your very next payday, as well as interest. Do not go with this kind of loan if you could not afford to pay it off in full on your next payday, which is ordinarily approximately two weeks from today. A few of these companies might make it possible for you to expand it yet an additional payday, but be aware that you will be having to pay a really high rate of interest on it at the start, and that interest will only continue on to increase if you stretch the duration of the payback period.

Determined by how much money you have to have, a quick payday loan could possibly not be what you are in search of because this type of loan is usually constrained to $1000 or less, sometimes as high as $1500. Therefore if you want more than that, or you require more time to pay it back such as in monthly installments like you generally would via a bank, credit union or loan company where you can extend the payments out over a couple of years, those other types of personal loans may well be more along the lines of what you require.

But this type of cash advance loan will be rather beneficial to come to terms with those life emergencies that arise out of nowhere and must be handled as soon as possible!

Any kind of loans can be taken, be it the secured loans or the unsecured loans or no credit check loans, they need to be repaid coupled with the interest component too. Finding the right kind of loans and getting them out of bad credit history even though one is looking out for debt consolidation is a daunting task. Loan Pitstop offers to do all the spade work and help you in identifying the right kind of loan that would fit your financial needs.

If you are stuck with short term financial problems, you can get them to solve it easily with the help of payday loans UK. Secured loans too can be availed by borrowing money against one’s property either for the purpose of debt consolidation or home improvement. In fact, Loan Pitstop is a one stop shop for different kind of loan products that are available in the market such as logbook loans, mortgages, cash loans, bad credit loans, no credit check loans and many more. It acts as an intermediary between you and the lender and sees to it that the money reaches you at the earliest possible in order to meet your financial goals and that too with the best loan deals.