"We're back, of course we're back,' Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum told Bloomberg TV in an interview on September 26. His confidence in Dubai's economic resurgence was reinforced days later in a US$1.25 billion Dubai sovereign bond issue that was four times oversubscribed, signaling the emirate's return to the fixed-income market. Renewed investor confidence in Dubai came on the heels of the debt restructuring agreement hammered between troubled state-linked conglomerate Dubai World and the majority of creditors to reschedule about US$25 billion of debt.
Dubai couldn't have done any better. It now stands to benefit from investor perception that the United Arab Emirates (UAE) and Qatar are insulated from the protests that have rocked the rest of the Arab world. "The Dubai story may conversely have benefitted (from the unrest) as it is regarded as a more stable jurisdiction," says Giambattista Atzeni, corporate trust vice president and MENA business manager at BNY Mellon. "If Dubai had not put in place a coordinated action plan for its debt, it might not been able to be in the same position regionally today."
Even before protests began, Dubai's US$1.25 billion issue triggered a flood of bond sales in the region, with investor demand for Gulf bonds proving so vigorous it prompted state-controlled Qatar Telecom to return to the market with a US$1.25 billion bond sale in October days after the Doha-based firm sold a US$1.5 billion bond that attracted more than US$15 billion in orders.
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