Dubai SWF upbeat on $2bn loan repayment

Investment Corporation of Dubai chief says no current plan to issue bond this year
Dubai SWF upbeat on $2bn loan repayment
(Photo for illustrative purposes only)
By Reuters
Sat 19 May 2012 10:13 AM

The Investment Corporation of Dubai (ICD), the emirate's sovereign wealth arm, has no current plan to issue a bond this year and will likely pay off a $2bn loan that is due next year, the fund's CEO told Reuters in an interview.

"ICD at the moment does not have any liquidity requirement," Mohammed al-Shaibani said on the sidelines of the Sarajevo Business Forum organised by the fund's subsidiary in Bosnia.

"But our subsidiaries are issuing bonds according to their needs," he added, referring among others to the Dubai Islamic Bank (DIB) that is planning to issue a benchmark-sized, dollar-denominated Islamic bond, or sukuk.

Shaibani said the ICD was still evaluating options for its $2bn loan due next year, part of a $6bn loan. The fund paid off the first tranche of $4bn last year.

"We are liquid and we don't think there is requirement, most likely we'll pay it down," he said.

Shaibani, who said that the government has no plan to change the management at ICD any time soon, also said there was no need to replenish the Dubai Financial Support Fund (DFSF) because it was in a good position.

"The Dubai Support Fund is quite asset-rich because when they support some of these government companies, they take collateral asset against that," he said.

Shaibani dismissed reports that the government-owned Emirates airline, of which the ICD is the parent firm, will issue a bond this year: "They don't seem to have requirements for bonds or sukuk at the moment."

He also said that repayment of the Dubai World debt will rely partially on asset sales and partially on refinancing.

"The sale of assets will contribute most likely to the majority of the 5-year facilities, but the 8-year facility will be a mix of equity injection and refinance," he said.

Shaibani said that ICD was interested to invest in real estate and financial services in Bosnia, where it has been present for the 10 last years through the Dubai Islamic Bank.

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