Dubai govt issues $500-mn bond
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The Government of Dubai, acting through the department of finance, has successfully priced a $500 million bond.
The offering of the ten-year bond, which has a put option at the end of five years will yield 5.59 per cent, was very well received and was three times oversubscribed, an official statement said.
The pricing of the current issue is 1.1 per cent lower than a similar five year bond issued last year which was then priced at 6.7 per cent.
This issuance is part of the updated Euro medium-term note programme, which was established in April, 2008.
All proceeds of the bond will be used for general budgetary purposes, the release distributed by the Dubai Government media office, quoting the department of finance, said.
The bond sale was extremely well received globally and generated a large order book, with over 90 investors placing orders of over $1.8 billion.
Orders were made by a wide range of high quality fixed income investors, including fund managers, insurance companies and banks.
The bonds were priced at par UBS, RBS, ENBD, HSBC and NBAD were the joint lead managers for the issue.
Abdulrahman Al Saleh, director general, department of finance, said: “This time around we were focussed on setting the price benchmark rather than the issuance size.
This successful issuance will provide Dubai with additional liquidity for general budgetary purposes.”
“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,” he said.
Investors are obviously supportive of the steps taken by the government over the last two years to counter the impact of financial crisis, and satisfied with the prudent measures implemented to control costs and manage the budget deficit, he added.
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