The second tranche of Dubai's $20 billion bond programme will be issued by the end of the year, a member of Dubai's financial crisis committee said on Monday. Dubai sold $10 billion of bonds to the United Arab Emirates central bank earlier this year to raise funds to support state-linked companies and plans to issue another $10 billion. "I think it will happen by the end of the year," said Sheikh Ahmed bin Saeed al-Maktoum when asked by Reuters about issuance plans.
Maktoum, who is also chairman of Emirates Airline, was speaking on the sidelines of the Dubai Air Show. The emirate - one of seven members of the UAE federation - and its state-linked firms have outstanding debt of about $80 billion, much of it incurred during a drive that saw Dubai expand activities in logistics, financial services, property and luxury retail and tourism.
Dubai said the proceeds from its bond scheme would underpin companies such as Dubai World's Nakheel, developer of Dubai's signature palm-shaped islands, part of its drive to build tourism as an alternative to its income from oil. Nakheel has $3.5 billion worth of Islamic bonds maturing in December and questions remain over the government's plan for them. Other state-linked firms include Dubai Holding, owned by the ruler of Dubai, Emirates airline and Emaar Properties.
The UAE also includes key oil exporter Abu Dhabi, which earns most of its income from crude oil exports. Last week, Sheikh Mohammed bin Rashid al-Maktoum, who is also prime minister of the UAE, the world's third largest oil exporter, said Dubai had passed the worst of the economic downturn and he had confidence in its ability to act in the global market.