Dubai utility raises $1bn with groundbreaking issue

The Dubai Electricity and Water Authority (DEWA) has priced its most successful foreign-currency bond issue to date, launching a $1 billion five-year benchmark sukuk at a 3% profit rate.

The dollar-denominated Islamic finance deal attracted a huge amount of interest, with the order book hitting around $5.5 billion ahead of closing earlier today, according to arranging banks. Part of the financing is expected to be earmarked to replace an outstanding AED-denominated sukuk which is due to mature later this year.

DEWA has seen its fortunes improve steadily after reforming its tariffs in 2011. The changes made included the introduction of the first-ever water charge for Emirati citizens. The Authority had its credit rating lifted to investment grade by Moody’s in 2012.

The joint bookrunners on todays issue were Standard Chartered, Citigroup, RBS, Emirates NBD, Dubai Islamic Bank and Abu Dhabi Islamic Bank.