Dubai’s finance department has sold $10bn (£6.9bn) in bonds to the United Arab Emirates, to ease its liquidity problems.
It will use the money to pay off its multi-billion dollar debt accumulated as a result of the emirate embarking on the biggest expansion project in history.
The global financial crisis has hit Dubai’s key real estate sector and made it more expensive to gain credit. The government said the deal would provide “the necessary liquidity” to make up for the fall in global funding due to the downturn.
While the United Arab Emirates (UAE) is one of the region’s leading oil producers, Dubai does not have vast crude oil resources. It has relied on credit to finance its expansion into developing the region as a hub for trade and tourism.
“This program will secure the necessary funding for Dubai to meet its financial obligations and continue development program,” the emirate said in a statement.
The five-year bonds would pay a 4% annual interest, it said.