Sunday, Nov 22, 2009
(This story was originally published Friday.)
DUBAI (Dow Jones)--Dubai will raise a second $10 billion bond to support the government and its related companies' debt soon, through a combination of government support and tapping international markets, a government official said.
"A reasonable chunk will be in the market," said Mohamed Al Abbar, a member of the Dubai executive council.
Al-Abbar told Bloomberg TV later Friday that most of the bond will be bought up by regional institutions and some government entities.
Dubai started a $20 billion bond program to support government and state-company debt in February. The United Arab Emirates' central bank subscribed to the first half of the bond.
Al Abbar said in an interview with CNN earlier this fall that Dubai would issue the $10 billion bond by October or November.
Dubai in October launched a $6.5 billion bond program that it said isn't linked to the second $10 billion bond. The October program aims to help manage government-related entities' debt. The first part of the program, a $2.5 billion sukuk, or islamic bond, was well received by investors and was oversubscribed.
But bankers are skeptical that Dubai could raise the $6.5 billion bond program and further cash from going to the market to raise a part of the $10 billion bond.
Al Abbar was positive on Dubai's growth prospects. "Dubai will see 5% growth this year," Al Abbar said, without outlining how growth would be achieved.
The U.A.E. economy is expected to contract by 1% this year, according to Merrill Lynch estimates. The Central Bank has also said it expects a contraction in the economy for this year.
-By Maria Abi-Habib, Dow Jones Newswires; +9714 364 4962; maria.habib@dowjones.com
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
22-11-09 0347GMT