Kuwait's foreign minister said the country is ready to help its debt-saddled neighbor, the United Arab Emirates. Speaking to reporters at the close of the annual Gulf Cooperation Council Summit Tuesday, Mohammed Al-Salem Al-Sabah said he had called his Emirati counterpart personally and offered any assistance necessary. Though Kuwait was one of the harder hit countries in the Gulf by the global financial crisis, the US ally still has substantial reserves and has announced more than $8 billion in development projects for next year. Dubai is reeling after its Dubai World conglomerate said it was unable to service its $60 billion in debt. Abu Dhabi on Monday announced $10 billion aid, calming regional stock markets. Abu Dhabi's $10 billion financial aid to Dubai to meet debt obligations was in the form of bonds, on similar terms to a $10 billion bond issue to the UAE central bank in February. The February bond issue is for a five years and pays a coupon of four percent per annum. “The loan is based on the same terms as the first tranche of the $20 billion bond,” a source close to Dubai's government, who did not wish to be identified, told Reuters. UAE Foreign Minister Sheikh Abdullah bin Zayed Al-Nahayan, said in remarks to the Jordanian state news agency on Tuesday the money was given against interest-bearing bonds. An analyst said the news that it was a bond issue indicates that the handling of the debt problem was in line with the right practices. “The fact that the $10 billion is in the form of loan is a normal, healthy development,” said Philippe Dauba-Pantanacce, senior economist at Standard Chartered in Dubai. “One major issue Dubai has been facing with its debt problem is certainly the mismatch in the various maturities, with a lot of leverage with short term maturities in front of projects with long term cash generation prospects,” he said. The UAE central bank snapped up half of the $20 billion bond program.
