Reuters reported that the Dubai government has repaid $ 750 million in bonds.
About a month ago, the Dubai government sold two-tier bonds worth two billion dollars today, Wednesday, in its first operation in the public debt markets in six years, at a time when the emirate seeks to support its financial conditions affected by the Corona virus crisis.
According to a document issued by a bank leading the operation seen by Reuters, Dubai sold a $ 1 billion 10-year sukuk at 210 basis points above the average fixed and variable interest swap rates and 30-year conventional bonds worth $ 1 billion at 4%.
The emirate has attracted more than $ 6.5 billion in bonds and more than $ 3.5 billion in bonds.
“There is no value in the sukuk, but there will be local buyers,” said a fund manager, speaking of the initial pricing, who declined to be identified. Initial pricing was reduced during the book-building of subscription orders by 40 basis points for sukuk and 37.5 basis points for conventional bonds.
“The pricing is attractive for Dubai … less money is on the table for investors,” said Tim Ash, an emerging market expert at BlueBay Asset Management.
And in July, Standard & Poor’s said that Dubai’s economy could contract by 11% this year, as it lowered the credit rating of two of the emirate’s major real estate companies to a high risk level.
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