Dubai’s planned Islamic bond issue attracted bids worth $5 billion for the dollar-denominated offer and 5.7 billion dirhams ($1.55 billion) for the dirham-floating note, bankers involved in the deal said today.
The emirate’s five-year fixed rate dollar bond may be priced to yield 375 basis points above the midswap rate, while its dirham Islamic bonds, or sukuk, may be priced at the same spread above the three-month interbank offered rate, according to the bankers who didn’t want to be identified because the sale hasn’t been completed.
Dubai and its state-controlled companies are raising funds after they amassed $80 billion of debt during a four-year real- estate boom, which produced the world’s tallest building and largest man-made islands. The global credit crunch had raised concern that the second-biggest sheikhdom in the United Arab Emirates may be unable to meet its debt obligations.
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