Dubai's bond four times oversubscribed

Dubai: The Government of Dubai said on Wednesday that it has priced a $1.25 billion (Dh4.5 billion) dual-tranche bond that was four times oversubscribed.

The bond has a yield of 6.70 per cent on a $500 million five-year tranche and 7.75 per cent on a $750 million 10-year tranche. The bonds were priced at par.

The bond sale generated an order book with over 370 orders of about $5 billion. Proceeds from the sale will be used for general budgetary purposes.

"The government has taken prudent measures to control costs and manage its budget deficit and this successful issuance provides Dubai with additional liquidity for general budgetary purposes," said Abdul Rahman Al Saleh, Director General of Dubai's Department of Finance.

"The pricing is very attractive given the fact that Dubai has been confident enough not to seek a credit rating," one analyst said.

"I'm sure the world has noticed how the emirate has dealt successfully with the Dubai World debt restructuring," he added.