A leading Dubai finance chief yesterday urged companies to take advantage of favourable market conditions to raise capital before liquidity dries up.
Sheikh Ahmed bin Saeed Al Maktoum, the chairman of Dubai's Supreme Fiscal Committee, said it was a good time to tap the market as recent debt issuances had shown.
"When there is liquidity in the market at a good price then everybody should take advantage of that and go to the market before it dries up," he told reporters in Dubai. Sheikh Ahmed said the demand for Dubai's recent sukuk sale was impressive.
Global investors seeking attractive yields have helped to push demand for Arabian Gulf corporate and sovereign bonds higher as some Dubai government-related companies seek to take advantage of the trend by issuing credit.
More are expected to come to the market in the coming months in the slipstream of the emirate and its airline, which has also moved to tap tumbling borrowing costs with a US$750 million (Dh2.75 billion) bond sale last week.
But as bond yields are driven down by investor demand at a time of strengthening equity markets, many credit analysts believe the window may be closing.
Improving credit conditions come as some Dubai Inc companies attempt to renegotiate the terms of loans taken out during the emirate's boom years.
Dubai Group, the financial arm of Dubai Holding, has been in talks with creditors to restructure some $6bn of debt. An initial deadline to agree a deal expired last month but the talks may be extended.
It is understood that an offer by Dubai Group to pay creditors 18.5 cents for each dollar of debt owed has been rejected by most of them.
Yesterday Sheikh Ahmed said he was hopeful that a deal could still be reached.
"I hope that the management of Dubai Group will be able to reach an agreement which will be good for both the financial institutions and the company and bring that company back to its strength," he said. "I am very positive about it."