Thursday, 26 November 2009

Abu Dhabi buys into Dubai debt

The US$5 billion (Dh18.36bn) lined up Wednesday by Dubai’s Department of Finance was part of a $20bn bond programme aiming to prop up government entities that borrowed heavily and ran short of cash after the financial crisis.

Dubai raised the first $10bn under the programme in February from the Central Bank. The Dubai Financial Support Fund (DFSF) was established in July to administer the distribution of the cash.

The announcement of another $5bn brings the total so far under the programme to $15bn. Terms of the new bonds were not disclosed, but an adviser to the Government said they were similar to those of the $10bn bond, which came with a 4 per cent interest rate and a 5-year maturity.

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