Dubai Sukuk up to US $1b

Oversubscription to be partly retained

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By  Eudore Chand Published  November 6, 2004

The Dubai Government has raised the size if its Sukuk (Islamic bond) by 33%, from US $750 to $1 billion. The first issue was twice oversubscribed. The world’s largest Sukuk will part finance the on-going $4.1 billion expansion at the Dubai International Airport. Dubai Islamic Bank is acting as mandated lead manager. The Sukuk will have a five-year maturity with a semi-annual coupon. It has been priced at 0.45% above the six-month dollar Libor rate. The last conventional bond issue by Dubai of some $400 million was priced at 0.475% above Libor. It was in the lead-up to the hosting of the IMF-World Bank meetings in September 2003. The airport Sukuk issue has been fully underwritten by six major banks.

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