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Dubai government bond oversubscribed threefold.

In an announcement made on the 16th of June 2011, the Dubai Department of Finance reported that the government's US$ 500 million bond issue had

been well patronised by 90 global investors who signed up to an order book in excess of US$ 1.8 billion.

"We are very pleased at the positive market reception to the bond offering, which demonstrates increased investor confidence in the strong long term

value proposition of the Emirate of Dubai," commented Abdul Rahman Al Saleh, Director General of the Department of Finance.

The new bond forms part of an updated Euro Medium Term Note Programme (EMTN) which was originally set up in April 2008. The latest upgraded

EMTN has a total value projection of US$ 5 billion. The joint book-runners are Emirates NBD, HSBC, Royal Bank of Scotland and UBS.

It is a US$ 500 million ten year term bond encapsulating a put option at the end of five years and will yield 5.59 per cent. The Dubai government emerged

with US$ 1.25 billion in interim funding in September 2010 as a result of its first sovereign debt issue following Dubai WorldAAEs November 2009 AaestandstillAAE

on a $24.9 billion pile of debt. That particular five year bond drew orders amounting to around US$ 5 billion and was priced at 6.7 per cent.

Director General Al Saleh described the rationale behind the lower value bond issue, "This time around we were focused on setting the price benchmark

rather than the issuance size. This successful issuance will provide Dubai with additional liquidity for general budgetary purposes," he said.

The latest Dubai bond sale attracted orders from a broad spectrum of fixed-income investors, which included fund managers, insurance companies and

banks with the bonds themselves priced at par. The United Arab Emirates member state returned to the bond market in the wake of an exceptionally

successful bond sale by Dubai carrier Emirates airline which raised US$ 1 billion on the 1st of June 2011.

Copyright Andy McTiernan. All rights reserved.

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Publication:Andy McTiernan Property & Economy Bulletin
Geographic Code:7UNIT
Date:Jun 17, 2011
Words:345
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