Dubai Govt Says To Decide On Bond Sale Over 1-2 Wks-Investors

The Dubai government told investors Thursday it will decide whether to launch a global bond sale in the next two weeks once it has gauged the interest of a broad range of investors, according to two investors who met with top officials from Dubai's Department of Finance.

The bond offering would be part of Dubai's effort to tackle its $80 billion debt pile, most of which was incurred during the emirate's property, tourism and logistics boom. It has used half of a planned $20 billion bond program and is considering tapping the remainder.

If it goes ahead with a deal, it would be Dubai's first public offshore bond in more than a year.

The Dubai officials met fixed-income and Islamic finance investors in Hong Kong earlier Thursday. They are also slated to meet investors in Singapore, Dubai, London and Frankfurt on their roadshow that wraps up next Tuesday.

"They (the government officials) said it's now too early to gauge investor interests. They said they will decide to go ahead or not after the roadshow," one of the investors said.

"They want to see if there is enough investor appetite before making any decision," the other investor said.

At the height of the global financial crisis, the Abu Dhabi-based central bank of the United Arab Emirates supported Dubai by underwriting the first half of its planned $20 billion bond program to bail out the sheikdom's struggling companies and economy.

Recently, Dubai officials including Omar bin Sulaiman, the head of the Dubai International Financial Center, have said they expect strong interest from private investors for a second bond.

Mohamed Alabbar, who helps oversee a committee evaluating the impact of the global credit crisis on Dubai, told CNN earlier this month that the emirate may raise the additional $10 billion by November.

According to Standard & Poor's Ratings Services, Dubai has almost $5 billion worth of debt maturing between September and the end of the year. The biggest share of this debt is held by Nakheel, a unit of government-owned Dubai World.

The company has a $3.5 billion Islamic bond maturing December. The bond, which will be pumped into Dubai's Financial Support Fund, is seen as a critical test of Dubai's credit worthiness.