3.42 PM Tuesday, 19 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 05:07 06:20 12:29 15:54 18:33 19:47
19 March 2024

Dubai’s Dh2.75bn bond oversubscribed 3 times

Published
By Waheed Abbas

Dubai Government’s $750-million (Dh2.75 billion) Islamic bond (sukuk) was oversubscribed more than three times, showing strong confidence in the emirate’s economy and its bid to become global hub for Islamic finance.

The Department of Finance said in a statement on Wednesday that it raised $750 million through a 15-year sukuk which saw oversubscription of $2.3 billion with a price of 5 per cent.

Abdulrahman Saleh Al Saleh, Director-General of the Department of Finance, said oversubscription points out that it represents the first release for a period of 15 years.

He said the sukuk offering comes in the context of the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai to make Dubai a global capital of Islamic finance.

The funds will be used for general budgetary purposes. The sukuk will cover Dubai’s small budget deficit of $240 million this year.

The Department of Finance said the issue was completed in a short time to benefit from favourable conditions on the global financial markets.

Dubai earlier tapped debt markets in January 2013 when it raised $1.25 billion with a two-tranche sale made up of a 10-year sukuk and 10-year conventional bond.

The new $750m issue, according to Department of Finance, attracted 79 investors from all over the world with 61 per cent from the Middle East, 17 per cent from UK, 10 per cent from rest of Europe, 9 per cent Asians and 2 per cent from other regions.

Three banks accounted for 60 per cent of investors, sovereign fund managers at 27 per cent and 10 per cent others.

The sukuk was arranged by Emirates NBD, Abu Dhabi National Bank, HSBC, Dubai Islamic Bank and Standard Chartered Bank.