| [Bloomberg] Dubai’s borrowing costs relative to Malaysia’s sank to a record as the emirate makes progress restructuring debts. The extra yield investors demand to own Dubai’s 6.396 pct dollar bond rather than Malaysia’s 3.928 pct sukuk dropped to 251 bps yesterday, the lowest ever, according to data compiled by Bloomberg. It was little changed today at 253 bps. The gap has narrowed 55 bps since the day before state-owned Dubai World signed an accord with creditors to alter terms on about $25 billion of debt on March 23. Dubai also benefited from a 64 pct jump in flows to higher-yielding bonds in the first quarter, data from Cambridge, Massachusetts-based research firm EPFR Global shows. “Investors are finding Dubai’s sukuk attractive because of the relatively higher yields, and the low risk associated with the emirate’s public debt,” an Abu Dhabi-based portfolio manager at Al Hilal Bank said. “The Dubai World debt deal has helped restore confidence in Dubai’s ability to repay its debts.” |
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