DUBAI, (Reuters) – The Dubai government launched a $1.25 billion two-tranche Islamic bond on Wednesday, lead arrangers said.

A $600 million, five-year portion was launched at 4.90 percent, at the lower end of an earlier indicative range, while the $650 million 10-year tranche was launched at 6.45 percent, also at the lower end of its range.

Sources said order books were almost $4 billion when books closed at about 0830 GMT.

Citi, National Bank of Abu Dhabi, HSBC and Dubai Islamic Bank are mandated bookrunners on the deal which should price later on Wednesday.