Dubai would almost certainly support Dubai Holding and the Dubai International Financial Centre (DIFC) but doubts are rising over its willingness to rescue other debt-laden entities, Standard & Poor's said.

Dubai Holding is a firm owned by the ruler of the  emirate, while DIFC is a financial zone owned by the emirate's government and which is tax-free for foreign-owned firms.

The ratings agency expects developer Nakheel, a Dubai World subsidiary, to repay a $3.5 billion Islamic bond maturing in December, but said lack of visibility on the emirate's strategy in allocating support funds was adding to uncertainty over its readiness to help state-linked firms.

"We consider the lack of transparency with respect to the government's strategy in dealing with the financial obligations of its government-related entities ... as creating significant uncertainty," S&P said in a report on Thursday.

Dubai, one of seven members of the UAE federation, kick started a $20 billion bond programme in February when it raised $10 billion from the UAE central bank, a move that calmed worries the former Gulf boom town could default on billions of dollars in debt due for refinancing this year.

A second tranche of $10 billion could be sold as soon as this month. S&P said it estimated Dubai's remaining resources from the first tranche to be at most $3-$4 billion, based on statements made about disbursements already made.

S&P estimated the debt owed by Dubai's government and government-linked entities at $80-90 billion, saying its debt burden was "a long-term challenge, given the sizeable repayments coming due in 2011 and 2012".

Even as the emirate meets near-term debt challenges, S&P said the government's willingness and ability to support its state-related entities was "unlikely to strengthen materially" as long as the entire public sector remained highly leveraged.

The likelihood that port operator DP World would receive financial support from the government was "very high", S&P said, while for real estate developer Emaar Properties this was "highly likely".

The ratings agency said these appraisals were based on the severity of the effect a given entity's default would have on the emirate's government or its economy, as well as on how strong the link was between a given unit and the government.   

The likelihood that Jebel Ali Free Zone would receive government support was "very high", S&P said, and for the Dubai Multi Commodity Centre (DMCC) this was "high".
 - Reuters