Thursday 14 July 2011

Abu Dhabi aid rewards Dubai electricity over Taqa - Banking & Finance - ArabianBusiness.com

Dubai Electricity & Water Authority bonds are generating more than twice the return compared with debt issued by Abu Dhabi National Energy Co, rewarding investors willing to bet on riskier Dubai assets.

Dollar-denominated bonds issued by the Dubai government- owned utility known as DEWA and due in 2015 have returned 9.3 percent so far this year, compared with the 4.2 percent return on 2014 dollar bonds sold by Abu Dhabi National, or Taqa, the neighbouring emirate’s utility. DEWA’s credit ratings are at least four steps lower than those of Taqa, Abu Dhabi’s top power supplier.

Confidence in Dubai, commercial hub of the United Arab Emirates, has improved this year as state-run companies, including holding unit Dubai World and property developer Nakheel, complete debt-restructuring talks with creditors.

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