A $1.3 billion, 10-year bond from Abu Dhabi's Dolphin Energy is attracting huge demand in the Gulf's secondary debt market, but it is reaching levels which it may not be able to sustain in the long term.
The frenzy over the bond illustrates the distortions which can occur in the region's bond market because of uneven supply of high-grade debt. Dolphin's bond is this year's first highly rated conventional issue from the Gulf, so it has a scarcity value which may not persist once more supply hits the market.
Dolphin's 2021 bond has rocketed in price from par when it was issued on Feb. 8 to just under 103.0 bid on Wednesday, yielding about 5.1 percent.
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