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
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.
Share this article
More from Investment
More from Business
Popular in Business
-
XPRESS
Way to go this DSF
A fun-filled route to guide you to all the happening dos in town
Business Editor's choice
-
Travel insurance offers peace of holiday mind
The wisest thing to do is to take out travel insurance before you leave.
-
Controlling risk through managed account
Can be simple stand-alone master funds or can grow to include several special purpose vehicles
-
Regional banking in throes of light and darkness
Loan-loss provision growing but lenders withstanding crisis
