Dewa raises $1b from sukuk

The Dubai Electricity and Water Authority, or Dewa, returned to global debt markets after an absence of more than two years on Thursday with a $1 billion Islamic bond, or sukuk, which drew very strong demand.

The government-owned utility printed the five-year paper at par at a profit rate of three per cent, a statement from lead arrangers said. The final profit rate was at the tighter end of guidance released earlier in the day, indicating healthy investor appetite.

Order books were reportedly over $5.5 billion before they closed in the Middle East, and traders indicated the deal was already bid higher in the grey market ahead of pricing.

The rarity of a regional utility issuing bonds combined with the Dewa’s investment grade rating of BBB and confidence in Dubai, which has helped bring down yields on existing debt, were all factors boosting demand for the deal.

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