Dubai readies two-part dollar bond, first issue since crisis
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Tue September 28, 2010 12:37 am
china wholesale market

UAE. Dubai said on Monday it would launch a benchmark dollar bond soon in its first debt sale since last year's crisis, and which financial sources said would be a US$1 billion-plus issue in two tranches.

Early pricing talk was for a 5-year tranche with yield guidance in the 6.875% area and a 10-year tranche in the 8% area, the sources said.

The bond is likely to total at least US$750 million for the five-year tranche and up to US$500 million for the 10-year, a banking source said, while a fund manager said pricing was expected on Tuesday.

The United Arab Emirates state, whose firms face some US$30 billion in bond and loan maturities in the next two years alone, has been gauging investor interest in a potential issue over recent months.

The fixed-coupon bond will be issued under its US$4 billion EMTN programme and the proceeds would be used for general budgetary purposes, the Dubai government said in a statement.

HSBC, Deutsche Bank and Standard Chartered will handle the placement.

The emirate's most recent sovereign bond sale was launched last October, barely a month before its flagship conglomerate Dubai World shocked global investors by calling for a debt moratorium.

"Investors globally are hungry for good yield, especially in emerging markets, where interest rates are at record lows," said Richard Fox, head of Middle East and Africa sovereign ratings at Fitch.

"This will hopefully improve appetite for an issue like this. We are expecting a minimum of US$1 billion," he said, adding it will help the emirate fund its 2010 budget deficit.

In August, a Dubai official said the 2010 budget gap would come lower than the AED6.0 billion (US$1.63 billion) planned.

The deficit widened to AED12.9 billion last year, the biggest gap since at least 2005 and above 4.2 billion planned, the prospectus for the new issue obtained by Reuters showed.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: September 4, 2015
UAE. The Middle East's 16 largest centres of economic growth could have substantial risk from a series of threats over the next decade, according to research for Lloyd's.
date:Posted: September 4, 2015
IRAQ. Iraq benefits from massive oil reserves and exports; Projected large increases in production will support economic growth and help alleviate fiscal and external pressures.
date:Posted: September 4, 2015
EGYPT. A new IFC-supported report by Wamda Research Lab finds that although support for start-ups has grown substantially, many challenges remain, hindering job creation and economic growth.
EGYPT. A new IFC-supported report by Wamda Research Lab finds that although support for start-ups has grown substantially, many challenges remain, hindering job creation and economic growth.
dhgate