Dewa bond signals credit thaw
Bond is well-received by market.
The enthusiastic reception DEWA’s bond issuance on Thursday is seen as a vote of confidence in the region.
The Dubai state utility company’s $1 billion bond, maturing in 2015, was more than 11 times oversubscribed by investors in the United States, Europe, Asia and the Middle East in just over two hours.
The final book size closed at $11.5bn, allowing DEWA to price the bond at 8.5 per cent semi-annual fixed coupon, a quarter percentage lower that the initial guidance of 8.75 per cent.
The bond is the first US dollar benchmark offering to emerge from a Dubai corporate since 2008, and the first to be issued by a Dubai entity after the Dubai World announcement on Thursday.
RBS, Citi, National Bank of Abu Dhabi and Standard Chartered Bank were the joint bookrunners.
Market observers believe that the success of the issuance points to an increasing confidence in the emerging markets and the Middle East. Strong names in the region and those with government backing will be able to tap the credit markets, albeit still at high rates of interest.