UPDATE 2-Dubai plans comeback to debt markets amid sharp financial downturn | Fintech Zoom


(Provides particulars) By Davide Barbuscia and Yousef Saba DUBAI, Aug 31 (Reuters) – Dubai has employed banks to advise it on its comeback to the worldwide debt markets because the Center East commerce, finance and tourism hub seeks to bolster funds badly hit by the coronavirus pandemic. It’s planning to problem U.S. dollar-denominated 10-year Islamic bonds, or sukuk, and 30-year standard bonds, a doc issued by one of many banks main the deal confirmed. Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, and Normal Chartered will prepare investor calls, which can start on Monday, forward of the potential debt providing. The deliberate offers will probably be of benchmark dimension, which usually means upwards of $500 million, as a part of a $6 billion sukuk issuance programme and of a $5 billion bond issuance programme, the doc confirmed. A banking supply estimated the issuance might be round $2 billion. The brand new deal – which might be the emirate’s first public debt issuance since 2014 – comes amid a pointy financial downturn for the emirate, which has revived considerations over its monetary soundness and introduced again reminiscences of the 2009 debt disaster. Again then, the worldwide credit score disaster induced Dubai’s actual property market to crash, threatening to pressure some state-linked corporations to default on billions of {dollars} of debt. Particulars of the issuance emerged as aides to U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu flew to the United Arab Emirates to place the ultimate touches to a pact establishing open relations between the Gulf energy and Israel. In accordance with a bond prospectus dated July 29 and seen by Reuters on Monday, Dubai renewed for 5 years in 2018 and 2019 $20 billion {dollars} of debt supplied by its oil-rich neighbour Abu Dhabi and the United Arab Emirates central bank within the aftermath of the 2009 disaster. As of the top of June this yr, the Dubai authorities had practically $34 billion in complete direct debt, the prospectus mentioned, including that there was no consolidated estimates for the full debt excellent of its authorities associated entities (GREs). “As such, the overall financial position and potential future financing requirements of Dubai’s GREs may not yet have been fully identified,” it mentioned. London-based Capital Economics, a analysis agency, estimates Dubai’s authorities and GREs have a complete of about $15.9 billion in debt maturing by the top of subsequent yr, of which $13.7 billion is due from GREs. Dubai’s economic system may contract by round 12% this yr, it mentioned. Because the coronavirus pandemic hit very important financial sectors of the emirate, Dubai this yr has raised over $3.6 billion in debt via a number of devices, the prospectus confirmed. This included a 7.7 billion dirhams ($2.10 billion) Islamic facility, a $275 million seven-year bilateral loan, a 1 billion dirhams eight-year loan, and two mounted earnings devices worth 1 billion dirhams and $700 million. A part of the cash raised was used to cowl expenditures associated to Dubai Expo 2020 – which was postponed by one yr because of the coronavirus outbreak – and to supply monetary help to state-owned airline Emirates, which confronted a cash crunch attributable to the COVID-19 pandemic. The division of finance declined to remark. Dubai’s state media workplace and airline didn’t instantly reply to Reuters requests for remark. ($1 = 3.6728 UAE dirham) Reporting by Davide Barbuscia and Yousef Saba; Modifying by Kim
Coghill, William MacleanOur Requirements:The Thomson Reuters Belief Ideas.

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