Abu Dhabi comes to Dubai's rescue

Dubai World, the investment organization of the Dubai government, jolted stock markets in late November when it said it would need to restructure the massive debt. It was unclear until Monday how its oil-rich neighbor Abu Dhabi would react, although there was some expectation it would help bailout Dubai.

Both are part of the collection of seven small states called the United Arab Emirates.

The bailout allows Dubai to meet a $4.1 billion bond obligation due Monday, The New York Times reported.

The news helped boost Asian stock markets. Although the Nikkei 225 index in Japan closed flat, the index rose sharply on the bailout announcement.

The bailout also staved off the possibility that creditors would force Dubai World property developer Nakheel into liquidation.

A colossal building boom in Dubai, meant to build up the country as a financial center, has stalled with the global downturn.

Copyright 2009 by United Press International.