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| Amid crisis, Dubai govt raises $5 bn via bonds |
| Press Trust of India / Dubai Nov 27, 2009, 19:31 IST |
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The embattled Dubai government has successfully raised a further $5 billion from two Abu Dhabi banks as part of its long-term bond programme, signalling that investors are still showing trust in the oil-rich city-state.
The Dubai government has successfully raised a further $5 billion from two Abu Dhabi banks on Wednesday as part of its $20 billion long-term bond programme launched at the beginning of 2009.
Quoting Al Hilal Bank Chief Executive Mohammad J Berro, Gulf News said, "$500 million was released to the Dubai government by Al Hilal Bank on Wednesday. The remainder will follow," he added.
Berro further said, "We have subscribed to Sukuk worth $2.5 billion because Dubai has come strongly out of the financial crisis. The tenure is five years and the coupon rate is 4 per cent, which is a good return."
This fund raising is despite the fact that investors are concerned over the huge debt burden of Dubai World, an investment company that manages and supervises a portfolio of businesses and projects for the Dubai government.
On November 26, Dubai World said it would ask creditors for a "standstill" on paying back its $59 billion debt until at least May.
Citing Al Mal Capital fund manager, the Gulf News said, "the market expects Dubai to raise another $5 billion soon which will take care of some of Dubai's debt and lift the confidence of the investors".
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