Dubai Sukuk Yields Drop to Record on Jafza, IPIC

The yield premium investors demand to hold Dubai’s unrated Islamic bonds over Malaysia’s declined to a record after the emirate’s state-linked companies made progress in settling $15 billion of debt due this year.

The spread on Dubai’s 6.396 percent sukuk due November 2014 over Malaysia’s investment-grade 3.928 percent notes maturing in June 2015 has fallen 98 basis points this year to 189 on May 4, according to data compiled by Bloomberg. The premium reached a record 188 basis points on May 3. The yield on the emirate’s sukuk dropped 180 basis points this year to 3.77 percent.

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