Dubai set to raise $1.5 billion on return to public debt markets

Dubai set to raise $1.5 billion on return to public debt markets
Dubai is set to offer investors about 220 basis points over mid-swaps for 10-year sukuk and about 4.125% for 30-year conventional bonds. (File/AFP)
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Updated 02 September 2020

Dubai set to raise $1.5 billion on return to public debt markets

Dubai set to raise $1.5 billion on return to public debt markets
  • It received over $7.5 billion in orders for the debt sale

DUBAI: The government of Dubai started marketing a dual-tranche bond on Wednesday, its first sale in public debt markets in six years, as the Middle East trade and tourism hub seeks to boost finances hit by the coronavirus crisis.
Dubai offered investors about 250 basis points over mid-swaps for 10-year sukuk, or Islamic bonds, and about 4.375 percent for 30-year conventional bonds, according to a document issued by one of the banks leading the deal and seen by Reuters.
The emirate’s first public debt issuance since 2014 comes amid a sharp economic downturn that has revived concern over Dubai’s finances and revived memories of the 2009 debt crisis that wobbled its economy. Dubai has budgeted a $3.2 billion deficit this year, a bond prospectus showed.
It also showed that while the government’s direct debt amounted to nearly $34 billion at the end of June, Dubai had no consolidated estimates for the outstanding total debt of government-related entities.
Dubai is unrated, which may exclude a pool of investors from the debt offering, said advisory and research firm Azure Strategy.
“A rating process would require a more granular disclosure of Dubai’s credit profile,” it said in a report on Tuesday.
In July, ratings agency S&P said Dubai’s economy could shrink 11 percent, as it cut the credit ratings of two of the emirate’s biggest property firms to “junk” status.


Malaysia takes legal action against EU over palm biofuel curbs

Malaysia takes legal action against EU over palm biofuel curbs
Updated 17 January 2021

Malaysia takes legal action against EU over palm biofuel curbs

Malaysia takes legal action against EU over palm biofuel curbs
  • Palm oil constitutes 30 percent of the global oils and fats production

KUALA LUMPUR: Malaysia is taking legal action at the global trade watchdog against the EU and member states France and Lithuania for restricting palm oil-based biofuels, the government said.

The world’s second largest palm oil producer, which has called a EU renewable-energy directive “discriminatory action,” is seeking consultations under the WTO’s Dispute Settlement Mechanism, the Plantation Industries and Commodities Ministry said in a statement.

Minister Mohd Khairuddin Aman Razali said the EU proceeded with implementing the directive without considering Malaysia’s commitment and views, even after Malaysia gave feedback and sent economic and technical missions to Europe.

The EU directive “will mean the use of palm oil as biofuel in the EU cannot be taken into account in the calculation of renewable energy targets and in turn create undue trade restrictions to the country’s palm oil industry,” he said in the statement.

The ministry filed the WTO request with cooperation from the Attorney General’s Chambers and the International Trade and Industry Ministry, taking action it had warned of in July against EU Renewable Energy Directive II.

Malaysia will act as a third party in a separate WTO case lodged by neighboring Indonesia, the world’s biggest palm oil producer, as a sign of solidarity and support, the ministry statement said.

Indonesia and Malaysia, together account for 85 percent of the global output of palm oil. Palm oil constitutes 30 percent of the global oils and fats production, and plays a significant role in fulfilling the demand in the global oils and fats market.

It is the world’s most produced and traded edible oil, and its versatility can be seen through its use in a wide range of food and nonfood products, which led to the remarkable palm oil consumption growth.

The US imported approximately $410 million of crude palm oil from Malaysia in 2020, CNN reported.