Dubai Said to Sell 10-Year Bonds With Put Option in 5 Years - Bloomberg

Dubai is meeting investors in London today ahead of a planned sale of 10-year bonds that will have a put option after five years, according to three bankers familiar with the deal.

The Persian Gulf emirate will issue the notes as part of a $5 billion bond program and will use proceeds for construction spending and to fund the sheikhdom’s budget, according to a prospectus. Yields on Dubai’s $1.25 billion of sukuk bonds due in 2014 fell to 4.78 percent today, from as high as 6.69 percent on Jan. 31, according to data compiled by Bloomberg. The yield dropped to 4.573 percent on June 1, the lowest since their sale in October 2009.

“Investors are all the more comfortable with Dubai risk,” Rawad Hakme, co-manager of fixed income allocation at Dubai- based unit of Egyptian investment bank EFG-Hermes Holding SAE said in an e-mail today.