$500m Dubai bond oversubscribed 3 times

The Government of Dubai, acting through the Department of Finance, on Thursday announced that it had successfully priced a $500 million bond.

The offering was very well received and was three times oversubscribed. The ten-year bond with a put option at the end of 5 years will yield 5.59 per cent. The pricing of the current issue is 1.1 per cent lower than a similar USD 5 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, according to a press release today distributed by the Dubai Government Media Office, quoting the Department of Finance. 

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.

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. Investors are obviously supportive of the steps taken by the government over the last 2 years to counter the impact of financial crisis, and satisfied with the prudent measures implemented to control costs and manage the budget deficit.”

UBS, Royal Bank of Scotland, Emirates NBD, HSBC and National Bank of Abu Dhabi were the Joint Lead Managers for the issue.

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