Business | Investment

Investors respond well to Dubai's MTN issue

The Dubai government on Wednesday completed the issuance of the Dh6.5 billion first tranche of its Dh15 billion Medium Term Note (MTN) programme.

  • By Babu Das Augustine, Banking Editor
  • Published: 00:15 April 17, 2008
  • Gulf News

Dubai: The Dubai government on Wednesday completed the issuance of the Dh6.5 billion first tranche of its Dh15 billion Medium Term Note (MTN) programme.

The MTN programme is aimed at raising funds for various infrastructure projects.

"We received excellent investor response to the issue in the Middle East and outside. The money from the issue will be used to fund airport and Metro projects," said Sami Al Qamzi, director general of Dubai Finance Department.

The inaugural dual tranche dirham-denominated issue consisted of a fixed rate note issue of Dh2.5 billion and a floating rate note issue of Dh4 billion. The fixed rate five-year note carries a coupon of 4.25 per cent, payable semi-annually and was issued at par.

The floating rate five-year note carries a coupon of three month Emirates Interbank Offered Rate (EIBOR) plus 50 basis points payable quarterly and was issued at a price of 99.857 per cent.

Managers

Emirates NBD and Standard Chartered Bank were the joint lead managers and book runners for the issue. The issue was marketed through roadshows in Dubai and Bahrain.

"The order book was around Dh10 billion which allowed us to price the transaction at the tight end of the guidance. Despite being a dirham denominated issue we got significant response from investors outside the Middle East," said Al Qamzi.

Subscribers

While the Middle East investors subscribed to 60 per cent the issue, 40 per cent was taken up by investors from outside the region, primarily from Europe and the US, he said

These notes are senior obligation of the Government of Dubai and will be listed on the Dubai Financial Market.

Although most of the subscriptions came from institutional investors, Al Qamzi said that he expected an active secondary market in government debts would evolve over a period of time.

  • Rate this article
  • Average reader rating (0 votes) 0 Stars
Tools

Emailing an article to friend is a simple way to share a news item. Your friend will receive an email with your name and email address as well any personal message you choose to send.

The information you provide on this page will not be used to send unsolicited emails.

This service is not intended to encourage spam, and action may be taken against individuals who maliciously enter personal details of another individual.

Share this article

More from Investment

  1. Sarasin goes long on equities

  2. Russia a better bet for investors than China

  3. Great expectations need reality check

  4. Diamonds strive to make the cut

All articles in Investment

More from Business

Gulf News
Popular in Business
Airlines in the region
Budget travel

Airlines in the region

Take a pictorial look at some of the budget airlines in GCC

Business Editor's choice