DUBAI: The government of Dubai said it has launched a $20 billion long-term bond program to help the Gulf emirate meet its financial obligations.

The first tranche of $10 billion was fully subscribed by the central bank of the United Arab Emirates, it said in a statement late Sunday.

“This issuance will provide the Dubai government with the necessary liquidity to substitute the liquidity that has dried up globally in the last 12 months and accordingly meet all upcoming financial obligations... and continue its development program,” it said.

The bond has an unsecured fixed rate of four percent a year, and has a five-year maturity.

This is the first such step to help Dubai, part of the seven-member UAE, tackle a slowdown in its real estate sector and a stock market rout amid a global credit crunch that has caused project delays and hundreds of job cuts.

A report issued earlier this month showed that $582 billion worth of building projects in the United Arab Emirates, or 45 percent of the total, had been put on hold due to the economic slowdown.

Meanwhile, Dubai shares rallied almost eight percent yesterday after the government of the emirate secured much-needed cash from a major long-term bond program.

Stock markets in other Gulf states were mixed, with Qatari and Abu Dhabi bourses rising, while Kuwait, Oman and Bahrain dropped.

The Dubai Financial Market Index surged 7.9 percent to close at 1,652.98 points, climbing above last year’s close for the first time this year. The market’s blue chips, including giants Emaar and Arabtec, rose by the maximum allowed 15 percent with a massive rise in turnover. Dubai’s main index ended last year down 72.4 percent, making it the worst performer in the Gulf.

The Abu Dhabi benchmark rose 1.1 percent, led by the real estate sector, though remaining below last year’s close.

Doha’s index rose 2.83 percent to 4,866.90 points, but remained 29.3 percent below its 2008 close.

Kuwait Stock Exchange, the second-largest in the Gulf by market value, dropped 1.5 percent to 6,517.70 points. The index has been dropping on uncertainty over a government stimulus package for banks and investment firms.

The tiny bourses of Oman and Bahrain dropped slightly.

The seven stock markets were strongly impacted by the global financial crisis last year and are still reeling under the crisis.