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.”