Apr 26 2012
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Dubai successfully raises $1.25 billion across 5 and 10 year tranches
The Government of Dubai, acting through the Department of Finance, today announced that it has successfully raised $1.25 billion across 5 and 10 year tranches, which was over three and a half times oversubscribed demonstrating strong investor appetite.
The well planned and swift execution took advantage of a positive market environment and priced at the tight end of guidance at 4.9% and 6.45% all in yield for a $600mn 5 year and $650mn 10 year respectively, according to a press release distributed today by the Government of Dubai Media Office.
This issuance is part of the updated Trust Certificate Issuance Programme, which was established in October 2009. Proceeds of the Sukuk will be used for general budgetary purposes and refinancing.
H.E. Abdulrahman Al Saleh, Director General, Department of Finance, said: "We are very pleased at the positive market reception to the Sukuk offering, which demonstrates increased investor confidence in the strong long-term value proposition of the Emirate of Dubai and the vision of its ruler HH Sheikh Mohammed Bin Rashid Al Maktoum. Investors were happy with the steps taken by the government over the last 3 years to counter the impact of financial crisis and prudent measures to control costs and manage its budget deficit. We have been able to reduce our cost of funding by 0.7% in the 5 years and 1.30% in the 10 year maturity compared to our previous issuances for similar tenors. We continue to examine ways to optimize our funding strategy by diversifying our funding options and extending maturities. This Sukuk issuance provides us enough liquidity to manage our budget deficits and refinancing plans proactively."
Abu Dhabi Islamic Bank, Barwa Bank, and ENBD were the Co-Lead Managers for the issue.
© Press Release 2012
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