Dubai’s government will meet fixed- income investors in London today and tomorrow ahead of a planned bond sale as yields fell to the lowest in 20 months.
The Persian Gulf emirate set up a $5 billion bond program and will use proceeds from the sale for construction spending and the budget, according to the prospectus. Yields on Dubai’s $1.25 billion of sukuk bonds due in 2014 fell to the lowest level since their sale in October 2009 to 4.573 percent on June 1 from as high as 6.69 percent on Jan. 31, according to data compiled by Bloomberg. The yield was at 4.76 percent today.
“There is likely to be solid demand for such a deal,” Chavan Bhogaita, head of the markets strategy group at state- controlled National Bank of Abu Dhabi PJSC (NBAD), said in an e-mail yesterday. “There has been a marked improvement in investor sentiment toward the Dubai credit story recently and credit default swaps spreads demonstrate this very clearly.”
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