CAIRO: Dubai has successfully finished issuing a dual-tranche Islamic bond of $1.25 billion, which will provide enough funds to its budget's deficit, and refinancing plan, according to a governmental officer statements on Thursday. Dubai priced on Wednesday a $600 million 5-year tranche at 4.9 percent and a $650 million 10-year tranche at 6.45 percent and the department of finance said the issues drew orders of more than $4.5 billion. “This Islamic bond “sukuk” issuance provides us enough liquidity to manage our budget deficits and refinancing plans proactively,” Director General at Dubai's Department of Finance Abdulrahman al-Saleh, said in a press statement. “We continue to examine ways to optimize our funding strategy by diversifying our funding options and extending maturities,” he added. “Investors were happy with the steps taken by the government over the last three years to counter the impact of financial crisis and prudent measures to control costs and manage its budget deficit,” Saleh explained. “This was a great success for issuance of Islamic bond, Emirates will be able to fill gaps in its budgets, budget deficit narrowed sharply to 3.7 billion dirhams ($1 billion) last year, we have better figures for this year,” a Dubai-based expert told Bikyamasr.com. ” Dubai's direct debt stood at 113.6 billion dirhams ($30.9 billion) at the end of March, according to a previous Reuters poll. We still have some time to hear better about our economy in the near future,” Mohamed Al-atia, a macro-economic expert, added. Dubai's 2012 budget has a deficit of $498 million, a smaller than 2011, as spending on development projects in the debt-laden Gulf Arab emirate dropped.
