Business | Banking
Dubai eyes longer maturity in $4.1b bonds
Dubai said a second set of bonds that it plans to sell from a Dh15 billion ($4.09 billion) borrowing programme will have longer maturities than the first as the emirate seeks to finance infrastructure projects.
- Reuters
- Published: 00:28 April 18, 2008
Dubai: Dubai said a second set of bonds that it plans to sell from a Dh15 billion ($4.09 billion) borrowing programme will have longer maturities than the first as the emirate seeks to finance infrastructure projects.
Dubai this week sold its first bonds, raising Dh6.5 billion to finance projects, including airports and an urban railway system.
"It will set another benchmark... with a maturity of seven or 10 years," Sami Al Qamzi, director general of Dubai's Department of Finance, said of the planned second sale.
He declined to give details.
"We believe the dirham market is more liquid regionally and we want to create a bond market," he said.
The emirate sold Dh2.5 billion of five-year fixed-rate securities, paying a coupon of 4.25 per cent, and Dh4 billion of five-year floating-rate bonds with a coupon of 50 basis points more than the three-month Emirates Interbank Offered Rate.
Dubai plans to spend about Dh52.5 billion during the next five years on roads, bridges and a metro network as the city's population surges, Roads & Transport Authority (RTA) Chairman Mattar Al Tayer said last month.
The emirate said last year it planned to seek a credit rating to ease the cost of borrowing outside the region.
Al Qamzi said the rating exercise was on hold as the emirate was considering its programme. Dubai, a Gulf tourism and trading hub, is targeting economic growth of 11 per cent per year to 2015.
Emirates NBD and Standard Chartered are helping Dubai arrange the bond sales.
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