Banks in Dubai were hit badly by the crisis. The devil, as ever, is in the details. Dubai's US$1.5 billion (Dh5.51bn) sukuk issue last week set a benchmark for issuers in the Gulf region, and was lapped up by a fixed-interest market eager to take part in the emirate's economic recovery. But, judging by the 135-page prospectus that potential investors were required to peruse before they made their decisions, it was not plain sailing all the way to the three times over-subscription the issue eventually commanded.
Deutsche Bank and other advisers to the sukuk must have burned the midnight oil on many occasions as they prepared a watertight case for Dubai's creditworthiness.
These documents, rightly, always flag up the risks inherent in any bond issue high up the priorities, and the nine pages of risks attached to Dubai, the UAE and the region are, for the main part, all the things you'd expect: general political and economic issues such as Dubai's dependence on foreign labour, its reliance on the oil-fuelled economic well-being of the UAE, and its exposure to current regional political instability, that is, the Arab Spring.
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