The government of Dubai is holding talks to secure a second $10bn loan from the Central Bank of the UAE, according to the prospectus for a $2.5bn sukuk (Islamic bond) issue which is also now under way.

According to the prospectus “the Dubai government is currently in advanced discussions in relation to the issue of a second tranche of securities” under the $20bn bond programme established with the Central Bank of the UAE, of which $10bn was issued in March.

The prospectus confirms market expectation that the second tranche of the bond programme would be issued by the end of 2009.

According to bankers who attended investor meetings with the Dubai’s Department of Finance, they were told that the second $10bn should be issued by the central bank in November.