DIFC plans Dh1.85b bond

The first bond to be offered through the Dubai International Financial Centre (DIFC) will be its own and could be as much as Dh1.85 billion ($500 million).

The issue is likely in the last quarter - before construction of the DIFC Financial District starts.

The bond will have Islamic and conventional components. It will be listed at the DIFC, and will set off a series of bond issues including the Dubai 2003 bond and the proposed World Bank offer.

Sources said the bond size could start from $300 million and rise to $500 million. Proceeds will be used to part-finance DIFC's real estate project, the balance coming from private investors and another financial means.

Discussions are being initiated with international institutions to mandate, underwrite and place the bond offer.

It would be rated by an international rating agency, as would be required of all DIFC listed bonds. Listing at DIFC would provide access to retail investors - both conventional and Islamic.

Hussain Al Qemzi, DIFC chief operating officer, confirmed the bond proposal, saying there is a lot of interest and that he was confident it would be oversubscribed heavily.

"It is a near sovereign offer - backed by the Dubai Govern-ment and real estate. We would be opening up real estate market in financing in a big way," Al Qemzi said.