The Government of Dubai announced on Thursday it would be raising $1.25 billion in two 5 and 10 year tranches.
The Department of Finance’s statement added that the subscription of the bond issue is over more than three and a half times.
“The well planned and swift execution took advantage of a positive market environment and priced at the tight end of guidance at 4.9 per cent and 6.45 per cent all in yield for a $600 million 5 year and $650 million 10 year respectively,” the government said in an emailed statement.
“Investors were happy with the steps taken by the government over the last 3 years to counter the impact of financial crisis and prudent measures to control costs and manage its budget deficit,” said Abdulrahman Al Saleh, director general at the department of finance. He explained that the cost of funding has gone down by 0.7% and 1.3% for the five-year requirements and for the 10-year maturities respectively.
“This sukuk issuance provides us enough liquidity to manage our budget deficits and refinancing plans proactively,” Al Saleh said.
Dubai’s new bond sale is the first time it tested credit markets since June 2011 when it issued a 10-year bond worth $500 million, attracting orders over $1.8 billion.