Dubai to raise $4bn via note issue




Dubai, the Gulf Arab region's commercial hub, plans to borrow as much as Dh15 billion to help finance development of its infrastructure, a government official said on Monday.


Dubai is set to begin roadshows for the first tranche of a medium-term-note (MTN) programme.


The size of the inaugural conventional issue had still to be determined, Sami Al Qamzi, director-general of Dubai's Department of Finance said in an emailed statement to Reuters.


The emirate will spend about Dh52.5bn over the next five years building roads, bridges and a metro network as its population growth surges, Roads and Transport Authority (RTA) chairman Mattar Al Tayer said on March 31.


Dubai, a Gulf tourism and trade hub, is seeking to achieve economic growth of 11 per cent per year until 2015.


The funds for the borrowing programme would be used for "general capital purposes and infrastructure development", Qamzi said.


According to London-based Meed magazine, which tracks Gulf project announcements in the construction, industry, energy and power sectors, the UAE accounts for more than $1 trillion (Dh3.67trn) worth of projects.


Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said last year that the emirate, which boasts islands in the shape of palm trees and a ski slope in the desert, wants almost to triple its gross domestic product to $108bn by 2015.


In order to cope with traffic congestion, Dubai has built a floating bridge over the Dubai creek, the city's main waterway, and is building new bridges, roads and introducing a water transport system.


State-owned Dubai Electricity & Water Authority (Dewa) raised $2bn in a syndicated loan earlier this year after delaying a bond sale in 2007 due to market conditions.


Dewa has said it plans to borrow as much as $19bn over five years to feed the fastest growing appetite for power and water in the world.


Emirates NBD and Standard Chartered Bank have been mandated as joint arrangers and lead managers for the Dubai government MTN programme, Qamzi said. (Reuters)