Coronavirus: Dubai issues rare Dh1 billion sukuk
Dubai raises funding amid perfect storm of Covid-19, economic slowdown and falling oil prices.
The government of Dubai has issued a sukuk for the first time in four years, proving that even amid historically low oil prices and a global pandemic, funding options remain for the Gulf’s sovereigns.
Gulf countries are facing the perfect storm of low oil prices, economic slowdown and a global health pandemic. Dubai, the region’s most open economy, a tourist destination and regional business hub, is particularly exposed to the economic slowdown.
The Dh1 billion eight-year sukuk issued by the government of Dubai at 4.7125% is in the form of a private placement, sole led by Standard Chartered. Dubai has not issued debt in the public market since 2014 but has done several private placements, most recently in 2017.
The deal was driven by reverse enquiry, according to sources. One senior DCM banker says the deal, which they will be able to repo with the central bank, had been sold to the Emirate’s banks.
“It’s a good way for Dubai to fund itself without Abu Dhabi writing a cheque again,” he says.