BLME comment on planned Government of Dubai Sukuk issuance
Please find below some commentary from
Bank of London and the Middle East
), following the news that the Government of Dubai has selected five banks to arrange a benchmark-sized, dollar-denominated sukuk believed to be worth at least $500mn.
Paul Bateman, Senior Risk Manager at
"This 10-year issue has come to market very quickly, and appears to utilise the existing Sukuk programme that investors are already familiar with. The suggested 4% price of the issuance appears to be fair, given the recent $650m issue maturing in May 2022 currently trades with a yield just inside 4%. Long-dated dollar swap rates have started to climb in the last two months, while Dubai's 10-year credit spread has fallen, so it looks like this issue seeks to lock-in a low long-term cost of financing before the window of opportunity may close. Demand for dollar Sukuk remains strong and the economic outlook continues to improve in the UAE, so the transaction is likely to be well-received by investors despite the absence of a credit rating."
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