The Government of Dubai has officially launched its 1.5 billion Emirati dirham ($408 million) bond issue to be listed on the Dubai Financial Market (DFM). This is the first bond ever issued by the Government of Dubai.
The bond issue is being arranged and underwritten by Emirates Bank International, HSBC, National Bank of Dubai, National Bank of Abu Dhabi and Standard Chartered Bank. It will have a term of five years with interest paid semi-annually and for the first time ever by a United Arab Emirates (UAE) issuer will carry a fixed interest rate coupon.
The final pricing will be based on the five-year US dollar Swap rate plus a spread to be established following a price discovery exercise undertaken by the Joint Lead Arrangers. This process is being used for the first time in the UAE for a bond issue and will help ensure that the issue spread reflects the actual market appetite.
The issue will be cleared and settled through the DFM and the dealings are expected to commence before the end of May. During the primary distribution period, the minimum investment amount will be one million Emirati dirhams, but, thereafter, investors will be able to trade the bond in multiples of Dh 25,000 via exchange brokers. The five Joint Lead Managers will also be acting as primary market makers providing liquidity in the bonds to the market participants.
Investors started providing their orders to the Joint Lead Arrangers as May 11, the subscription period will be open until the May 27 but could be shortened with a 24 hour notice.
Established in 2000, DFM aims to create a transparent market place that serves the interest of the national economy. DFM provides maximum liquidity in securities trading through the interaction of supply and demand to determine fair pricing of securities, while protecting investors against unfair and improper practices. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
