Dubai looks set to cash in on strong demand for high-yielding emerging market debt with a $1 billion dual-tranche Eurobond seen attracting orders for twice that sum on Tuesday. The indebted emirate will sell a total of $1 billion in two tranches of $500 million, with yield guidance for the five-year tranche seen at 6.75 percent and for the 10-year at 7.875 percent, a source at one of the lead managers said on Tuesday. That is tighter than initial guidance earlier in the day and some fund managers predicted a greater amount would be ultimately sold. A source at another lead manager said orders for the bond sale exceeded $2 billion and pricing is expected on Wednesday. Analysts said the Gulf Arab emirate's planned dollar bond issue, weeks after its flagship conglomerate clinched a debt restructuring deal, was timed to take advantage of more favourable market conditions than at any time since the Dubai crisis broke. One fund manager in London said: “Clearly there is a window for all kinds of debt to be issued. Dubai is on the edge of the demand area between Asia and Europe.” Dubai would launch a benchmark dollar bond soon through the government's European medium-term-note) program started in April 2008.
