8 November 2009, 6:44 PM
The repayment of the bonds, which matured on November 4, followed the issuance of a two-tranche $1.93 billion dollar- and dirham-denominated Islamic bonds, or sukuk, that generated an order book with more than 300 investors placing bids in excess of $6.3 billion, the Department of Finance said in an e-mailed statement.
“Investment in infrastructure is essential for Dubai’s economic success and the development of our world leading airport facilities is central to this strategy,” said Abdulrahman Al Saleh, Director General, Department of Finance.
Dubai International Airport has grown rapidly in recent years and has a current annual passenger capacity of 50 million, he said.
“The achievements and bright prospects of Dubai were recognised by the global investment community on our recent international roadshow. We were delighted by the enthusiastic investor appetite and high levels of confidence in the Emirate,” said Al Saleh.
Dubai’s government-controlled companies are seeking to raise funds after they amassed $80 billion of debt during a four-year property boom. In December, property developer Nakheel PJSC has to repay Islamic bonds of $3.52 billion.
With a track record of prompt repayments, Dubai has been seeking to reassure investors that would meet all debt obligations. Last month, Dubai Holding LLC, a diversified business owned by the government, repaid a $250 million loan to BNP Paribas.
Total debt repayments for Dubai-based government related entities are estimated to total nearly $50 billion over the next three years, Standard & Poor’s said last month.
The rating agency’s estimate of the current total amount of debt owed by the Dubai government and its various related entities is $80-$90 billion.
“According to approximate data contained in the report, cumulative repayments for Dubai-based GREs over the coming three years are significant and amount to nearly $50 billion, which is equivalent to around 70 per cent of Dubai’s current estimated GDP. The majority of this debt will come due in 2011 and 2012,” Standard & Poor’s said in its report.
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