Dubai World's debt standstill

Dubai's rapid pre-crisis growth had been financed heavily by government-related entities borrowing to fund ambitious infrastructure, real-estate and hospitality projects, on the assumption that continued property sales and tourism growth would cover the debt. When the global financial crisis hit in 2008, Dubai property prices fell by roughly half or more in many areas within about a year, and the flagship companies behind that development found themselves unable to generate the cash flow needed to service what they had borrowed. On November 25, 2009, Dubai World, one of the emirate's largest state-owned holding companies with roughly $59 billion in liabilities, announced it would seek a six-month standstill on at least $4 billion of that debt, including obligations tied to its property arm Nakheel, developer of Dubai's palm-shaped artificial islands. International markets fell sharply on the news amid fears the announcement signaled a wider sovereign default risk for Dubai itself. Neighboring Abu Dhabi ultimately provided financial support to help Dubai World restructure its debts over the following years, averting a full default.