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DEWA says no to bonds
Despite the plunge in borrowing costs, Dubai's Electricity and Water Authority has said no to bond plans for now
July 25, 2012 1:58 by Reuters
Dubai Electricity and Water Authority (DEWA) has no plans to tap bond markets for now despite a sharp drop in borrowing costs, its top executive said late on Tuesday.
“We are not planning to issue any bonds,” chief executive Saeed Mohammed al-Tayer told Reuters on the sidelines of a government event. “Not now.”
In March, Tayer told Reuters that if DEWA were to raise external finance in the future, the money might come from export credit agencies, the cheapest source at the time.
Since then, however, yields on Dubai-linked bonds have plunged, partly because of growing investor confidence in the emirate. The yield on DEWA’s outstanding U.S. dollar bond maturing in 2020, which was around 6.6 percent in March, has dropped to about 5.5 percent.
DEWA issued 7.35 billion dirhams ($2 billion) worth of bonds in October 2010. It is the sole provider of electricity and water in Dubai.