Dubai sets deal on debt

Dubai World, the state-owned conglomerate, has reached a deal to restructure $23.5 billion in debt with its core lenders, addressing the most immediate of a string of problems facing investors in Dubai.

The deal, which includes no new money from the government and is broadly in line with proposals made in March, must still be agreed to by banks outside the core negotiating panel, which holds 60 percent of the exposure, Dubai World said.

Lenders will wait up to eight years to get their $14.4 billion back but have avoided a “haircut” on their principal under the deal’s terms, which offers 1 percent cash interest and an extra 1.5 to 2.5 percent a year rolled into a lump sum payment on maturity. Dubai will convert into equity the $8.9 billion it is owed by the group.