Because we know it’s easier said than doneMay 28, 2015 9:53
Dubai has no plans to issue new bond-finance chief
Says Dubai has sufficient sources at the moment; $1.25 bln issue subscribed 35 pct by Asian investors.
October 2, 2010 12:59 by Reuters
Dubai, returning to international debt markets this week with a $1.25 billion issue that has met strong Asian investor demand, has no plans to issue a new bond in the “near future”, its finance chief told Dubai TV on Friday.
The debt placement on Wednesday, the emirate’s first since its debt crisis rattled global financial markets last November, unfroze the credit market and attracted healthy demand from international investors.
Dubai’s finance chief said the emirate would therefore not need to tap the debt market again any time soon.
“The resources currently available and the operating revenues meet the requirements at the present time for the operating expenses and capital expenditures,” Abdulrahman al-Saleh, director general of Dubai’s department of finance, told the TV station.
The unrated issue was four times oversubscribed and priced at a yield of 6.7 percent on the $500 million five-year tranche and 7.75 percent for the $750 million 10-year tenor with spreads of 542.7 and 527 basis points, respectively, over U.S. Treasuries, lead arrangers said.
“We chose a bond offering in the international market to maintain our relationships with global investors,” Saleh said.
“(The bond) is a response to all the doubts in the past about the strength of the emirate to work with the investors and enter the global financial markets,” he added.
He said the issue was 35 percent subscribed by Asian investors, 30 percent by European investors and 30 percent by Middle Eastern investors.
Dubai, one of the seven United Arab Emirates, and its companies have been climbing out of a $100 billion-plus debt hole over the past year. Richer emirate Abu Dhabi and its banks signed up for half of its $20 billion rescue programme for state-owned enterprises such as Dubai World.
Saleh said he expected government spending to “drop by a high percentage as soon as the infrastructure projects are completed by the end of this year or in 2011, which will strengthen the budget and allow the government to develop new facilities in the future.”
Dubai’s government said in a roadshow presentation this week it saw a 2010 budget deficit of 6 billion dirhams ($1.63 billion) and expenditures of $9.6 billion, down 14.4 percent.
($1=3.673 Uae Dirham)
(Reporting by Martina Fuchs; editing by Tim Pearce)