The Gulf city-state, Dubai’s government hired HSBC (HSBA), Deutsche Bank (DBKGn) and Standard Chartered (STAN) to issue dollar bond. The issue would be the first government bond sale since Dubai World, a flagship company of the emirate, left financial markets reeling in November last year by asking for a delay in repaying $26bn of debt.
The Dubai Department of Finance held a series of non-deal fixed-income investor meetings in Asia in August and in Europe in June. The roadshows were part of a strategy of providing regular updates to both existing and prospective fixed income investors around the world on the Emirate of Dubai’s economy, it said at the time.
Dubai’s return to debt markets comes at a time when international investors, turned off by sluggish equity markets, are increasingly happy to take on more credit market risk in the pursuit of a decent return on investment.
Since Dubai’s last debt issue in October, Dubai Electricity & Water Authority (DEWA) has been the only Dubai entity to raise money through the debt capital markets. DEWA sold a $1bn bond in April in a deal that demonstrated continued investment appetite for the emirate’s debt.
Dubai is focusing its efforts on resolving other elements of its US$109M debt, including parts of the US$12B owed by Dubai Holding, a conglomerate owned by its ruler, Sheikh Mohammed bin Rashid al-Maktoum. The government last approached international markets in October through a US$6.5B program. The state-backed utility in April launched a successful bond issue.