Abu Dhabi's Dubai aid shrinks to $5 billion

Reuters ^ | January 18, 2010 | Amran Abocar

[Cheap_Hessian]

DUBAI (Reuters) - Abu Dhabi's $10 billion December bailout to Dubai included $5 billion already committed by two banks controlled by the emirate, signaling Abu Dhabi's cautious approach to helping its debt-laden neighbor.

Analysts said news that Abu Dhabi had directly lent less than previously thought also indicated the wealthy emirate wanted more evidence of Dubai's fiscal probity, after helping it avert an embarrassing default on a state-linked bond.

A Dubai government spokeswoman said on Monday that the last minute lifeline on December 14, included $5 billion raised from Al Hilal Bank and National Bank of Abu Dhabi which had been announced on November 25.

Dubai rocked global markets that same day when it requested a standstill on $26 billion in debt linked to its flagship conglomerate Dubai World and its two main property developers, Nakheel and Limitless World.

"Obviously it's a lot less cash than we had assumed," said Raj Madha, an independent analyst based in Dubai. "The interesting thing is what it says about the behavior of Abu Dhabi: whether they are just rushing through a large amount of money or whether they are providing funding where required."

[2banana]

Translation: Infidel dogs will not get their money back...