Dubai (Special Report)
For the first time, the UAE’s central government has introduced dollar bonds in the market, which will raise three to three and a half-billion dollars.
Earlier, the UAE states Abu Dhabi and Dubai issued individual bonds, but this is the first time such bonds have been issued at the federal level. According to Wam, the bonds are for ten, 20 and 40 years.
Ten-year bonds are offered at 105 basis points, 20-year bonds at 135 basis points and 40-year bonds at 3.6%.
These bonds are likely to hit the market with ten basis points higher than Abu Dhabi bonds. Looking at the issuance for the first time, it is expected that it will have a new insurance premium.
Even with this estimate, these bonds are seen as stable with the full support of the Abu Dhabi government, whose balance sheet is very strong. The capital raised from these bonds will be spent on infrastructure projects.
