Dewa sukuk fails to hit pricing ambitions

03 June 2008
Dubai Electricity and Water Authority (Dewa) has completed a AED2.75bn ($749m) sukuk issue at margins of 125 basis points over the emirates interbank offered rate (eibor), indicating that investor demand was not as strong as the utility had hoped.

Bankers close to the deal says Dewa had hoped to garner enough investor interest to reduce the spreads on the debt.

The size of the deal was smaller than expected and at higher margins than the $2bn bond Dewa pulled from the market late last year. That deal was priced at 120 basis points over the London interbank offered rate (libor).

The completion brings the firm’s current fundraising total to nearly $2bn, after Dewa completed a $1bn issue on a securitisation programme launched last year. This deal was done at 25 basis points over libor, with the low rate secured because Dewa offered its future income from utility bills as security on the debt.

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