Dubai places US$1.9bn sukuk

Published: November 10, 2009

Dubai’s government placed two five-year Islamic bond issues worth almost US$2bn on October 28, the biggest sukuk sale from the Gulf region this year. The dollar tranche of the sukuk was US$1.25bn, while the UAE dirham tranche was set at AED2.5bn (US$680.6mn).

The pricing was set at 375 bps +/-10 points over mid-swaps for the dollar tranche, and with the same spread over three-month EIBOR for the dirham tranche.

The move is part of the US$6.5bn conventional and Islamic bond programme launched earlier in the month. The successful subscription is said to boost investors’ confidence in the Emirate.

Earlier this year, Dubai issued the first half of a US$20bn bond that was bought by Abu Dhabi’s central bank. Dubai has suffered significantly in the global financial crisis, leaving the country with the restructuring of a debt pile estimated at US$80bn.