LONDON, (Reuters) – The Dubai Department of Finance’s 2014 Islamic bond, issued last November, fell sharply on Friday, along with other assets from the emirate as uncertainty grew about the fate of debt-laden state-owned firm Dubai World.
The five-year bond fell 2 points in price to a record low of 86.5 with the yield rising half a percent to about 10 percent, according to Reuters data.
“Dubai cash bonds are selling off massively. The 2014s have fallen to the 80s because of all kinds of rumours, none of them substantiated,” a bond trader in London said.
The trader said Dubai credit default swaps had traded as high as 660 basis points at one stage but were quoted around 640 bps by 1515 GMT. That is the highest level since November when Dubai asked creditors for a standstill on some of state-run Dubai World’s debt.