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28 February 2024

Dubai utility waits on market recovery for bond

By Agencies


Dubai Electricity and Water Authority (Dewa) will revive plans for a bond sale when market conditions improve, the utility's managing director said in remarks published on Thursday.

State-owned Dewa, which was aiming to sell as much as $2.5 billion of bonds to raise funds for expansion, postponed an Islamic bond issue in November on rising borrowing costs and expectations the UAE will revalue its dollar-pegged currency, bankers said at the time.

"We wanted to test the market," Saeed Mohammad al-Tayer said, a Dubai-based daily reported.

"In due course, when the market recovers, we are coming back," Tayer said.

A global credit crunch triggered by defaults on US home loans in July has prompted many Gulf borrowers to shelve bond sales as banks became more reluctant to lend.

UAE investors in dollar bonds, meanwhile, have feared a dirham appreciation because this would reduce returns in local currency, bankers said in November.

Qatar Fertiliser Co, a unit of Industries Qatar, in October also dropped plans to sell $1.2 billion of bonds.  (Reuters)