DUBAI: Favourable market conditions may prompt Dubai to issue another sovereign bond this year, a top official said yesterday, adding that the emirate was looking at alternative means to repay its debt if asset sales did not materialise.
Global investor sentiment towards Dubai has improved greatly over the past year, helping the emirate tap capital markets. In January, it raised $1.25bn from a two-part international bond sale, drawing heavy investor demand.
“The market is right, the price is right, then why not?” Sheikh Ahmed bin Saeed Al Maktoum, a close advisor and uncle to Dubai’s ruler, said when asked whether the emirate might make a second sovereign debt issue this year.
Sheikh Ahmed, a key figure in the emirate’s recovery from its 2009 debt crisis, was speaking on the sidelines of a Dubai travel industry conference. He holds a host of top positions in Dubai including the chairmanships of its largest bank, Emirates NBD, state-owned investment firm Dubai World and the Emirates airline.
Despite its recovery from the crisis, a major concern among Dubai’s creditors has been the slow pace of asset sales, which are seen as a major means for the emirate to finance repayments of its obligations.
Four years ago, Dubai was forced to request a $25bn debt restructuring for Dubai World. The restructuring plan envisaged the sale of some assets to meet obligations, but there still has been little progress with sales.
Sheikh Ahmed said the emirate was looking at an alternative plan to repay its debt.
“We will look at something like this. I can’t specify what, since it’s confidential information because of the restructuring,” he said when asked if an alternative to asset sales was in place.
Sheikh Ahmed said that in some areas, asset sales might have to be delayed, “because we might see in six months to one year things will be better.”
Banks in the region are worried that the emirate might push lenders into a second round of debt restructuring in the absence of a pick-up in asset sales.
Reuters
