The destabilizing news out of Dubai is inarguably a negative for issuers out of the region - what many investors effectively saw as implicit sovereign support has now vanished.

But the impact for true asset-backeds in the United Arab Emirates and neighboring countries is perhaps more nuanced. In the short term, it could hurt the few existing deals, as indeed it has already sparked negative ratings actions for some. But it might also shift the economics of financing in the region to the benefit of ABS.

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