Dubai received a warm welcome from international investors on Wednesday as the emirate prepared to fill orders of about US$2 billion (Dh7.34bn) for its new Islamic bond.
The issue was more than three times oversubscribed, although bankers said the five-year bonds were likely to yield about 6.6 per cent and 5.6 per cent depending on the currency. By comparison, the five-year Abu Dhabi bond due in 2014 yields 3.85 per cent.
“It is only logical that investors expect a higher return for taking on Dubai risk,” said Chawan Bhogaita, who heads credit research at the National Bank of Abu Dhabi.
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