The total outstanding external term borrowings of the Government of Dubai stood at 115.4 billion U.A.E. dirhams ($31.4 billion) as on May 20, 2011, in addition to which the government also has financial contingencies and extended guarantees, according to an investor presentation made Friday by the emirate's department of finance.
On Thursday, the debt-laden emirate said it plans to test credit-market sentiment again and issue a dollar-denominated, benchmark-sized bond, amid signs that confidence in Dubai's economic fundamentals is slowly returning.
Dubai's department of finance has appointed UBS AG, Royal Bank of Scotland Group PLC and Emirates NBD for a dollar-bond issue under its EMTN program. Proceeds will be used for general budgetary purposes.
A series of meetings with fixed-income investors will take place in London on Monday and Tuesday, with the bond expected to launch and price thereafter, subject to market conditions, according to a banker familiar with the matter.
Dubai's nominal GDP was AED300.8 billion in 2010 and its total direct debt/nominal GDP ratio equates to about 38%, according to the presentation, which was seen by Zawya Dow Jones Friday.
The Government of Dubai has provided outstanding AED7.6 billion of guarantees in relation to the financial obligations of Dubai Electricity & Water Co. and AED6.53 billion guarantee exposure to the DURL Consortium with respect to Dubai Metro, the presentation said.
The Dubai government has also provided contingent obligations of AED1.84 billion outstanding in relation to the financial obligations incurred by Salik One SPC Ltd., and its obligations under the shortfall guarantee relating to the restructuring of Dubai World is at $2.19 billion, the presentation added.
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