Dubai issued a $1.25bn bond with a yield of 6.7% for the 5-year tranche in late Sept
Dubai asked lenders pitching to manage the emirate's recent sovereign bond
issue to offer the government a $500 million loan over three years, the
Financial Times reported on Monday, citing bankers.
Dubai issued a $1.25 billion bond with a
yield of 6.7 percent for the five-year tranche in late September, which drew
about $5 billion in subscriptions.
"It was 'pay-to-play,'" a senior regional banker invited to join
the mandate told the FT.
"It wasn't a conversation. It was more
like 'this is the price to pay.' There was no reward for past support."
A spokeswoman for Dubai had no immediate
Deutsche Bank, HSBC and Standard Chartered were mandated for the
offering but declined to comment, the FT said.
Bankers familiar with the matter said
significant sums had already been committed while others say negotiations are
continuing over the size and tenor of potential loans, according to the FT.
The government denies raising new bilateral
loans from the mandated banks, FT said. (Reuters)