After Abu Dhabi pledged $10 billion to help Dubai World pay off its $4.1 billion sukuk (an Islamic bond) commitments, global markets revived and the Gulf seemed to breathe a sigh of relief. But much of the damage to Emirati banks has already been done, with ratings slipping by the week and — market fluctuations aside — for foreign banks the worst may be yet to come. The $10 billion covers the $4.1 billion in principal plus interest that was due on December 14, along with further interest payments due until April 30, with some funds still left over for working capital. But Dubai World creditors still cannot be sure that they will get what is owed to them when their turn comes. Those banks without exposure to Dubai World were quick to spread this news and those with anything more than marginal exposure seem content to hide their heads
