Dubai launches $20 billion bonds

[LahoreEstate]

DUBAI (February 23 2009): The government of Dubai launched a $20 billion sovereign bond programme on Sunday to ease tight liquidity conditions, saying the United Arab Emirates central bank has subscribed to half of the issue.

The move comes amid mounting concerns about whether Dubai, a regional tourism and trade hub, will be able to refinance debt it accumulated to finance expansion projects during a six-year economic boom spurred by high global energy prices.

The bonds "will secure the necessary funding for Dubai to meet its financial obligations and continue its development programme," the emirate, one of seven members in the UAE federation, said in a statement.

The five-year bonds would pay a fixed 4 percent interest per year, it said, but did not give a date for the issuance of the rest of the bonds or say who would be eligible to buy.

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