Dubai refinancing deal reached on $20 billion owed

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DUBAI, United Arab Emirates -- Dubai has reached an agreement with Abu Dhabi and the United Arab Emirates' central bank to extend payment of $20 billion of debt that was due this year.

Dubai built up tens of billions of dollars in debt during a building boom, but struggled to repay it as the global financial crisis battered its economy and property market. Dubai is one of seven emirates in the UAE.

The UAE's official WAM news agency reported Sunday that the deal gives Dubai five more years to repay the debt at a fixed interest rate of 1 percent. The term is renewable.

The debt consists of a $10 billion loan from the oil-rich emirate of Abu Dhabi, which is also the UAE's capital city, and another $10 billion in central bank bonds.

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