Dubai raises $5bn using bond issue

25 November 2009

National Bank of Abu Dhabi and Al-Hilal Bank provide money

Dubai has raised $5bn through the second tranche of its $20bn bond programme. The money was provided by National Bank of Abu Dhabi (NBAD) and Al-Hilal Bank providing the money.

On 25 November, the Dubai government drew down $1bn for use by the Dubai Financial Support Fund. This was established in July to distribute the funds raised by the $20bn bond programme to the Dubai government and its government-backed companies.

NBAD and Al-Hilal provided $500m each for the first $1bn. The debt will run for five years, with an interest rate of 4 per cent. The terms are the same as those on the first $10bn issued under the $20bn bond programme, which was purchased by the Central Bank of the UAE.

Al-Hilal is an Islamic bank owned by the UAE federal government and NBAD is majority owned by the Abu Dhabi government. Al-Hilal purchased a $500m sukuk issued by the Dubai government and NBAD purchased a $500m conventional bond.

A spokesman for Dubai’s Department of Finance, which took charge of the new issue, says the government will draw down the next $4bn when it needs the money.

The Department of Finance said the amount raised “was determined by the emirate’s current needs and obligations.”

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications