Dubai: Investment Corporation of Dubai (ICD), which holds some of the emirate’s main assets, has launched a $700-million Islamic bond, or sukuk, issue and a $300-million conventional bond, according to a lead manager.
The Gulf state is looking to take advantage of lower yields and increased appetite for its paper as it benefits from a strong rebound after the global financial crisis left its economy in tatters.
The debt sale this week comes after it raised $750 million late last month to help finance its fiscal debt, pay for infrastructure projects and to refinance more expensive obligations.
The profit rate for the six-year sukuk is 160 basis points over mid-swaps, while the spread on the 10-year conventional bond is 210bps over mid-swaps, according to a document from one of the lead managers.
Citi, Emirates NBD Capital, HSBC and Standard Chartered Bank are book runners for the conventional bond, and Dubai Islamic Bank joins them for the sukuk issue.
Dubai-whose total direct debt amounted to about $29 billion as of March 31, while guarantees and contingent obligations were some $4.9 billion-in March had also refinanced $20 billion of debt it owed to its neighbour Abu Dhabi and the UAE Central bank at a fraction of the original cost.
