Dubai hired Royal Bank of Scotland Group Plc (RBS), UBS AG and Emirates NBD PJSC (EMIRATES) for a benchmark dollar bond sale, three people familiar with the transaction said, as the emirate seeks to bridge its budget deficit. Conference calls with investors will begin tomorrow, with one meeting scheduled in London next week, one of the bankers said, declining to be identified because the information is private. A benchmark bond is at least $500 million. Dubai government-owned Emirates, the world’s biggest airline by international traffic, on June 1 raised $1 billion from the sale of five-year bonds at a spread of 330 basis points over the benchmark mid-swap rate. The government in January forecast a deficit of 3.78 billion dirhams ($1 billion) for the year compared with 5.99 billion dirhams in 2010. Dubai’s Department of Finance last sold bonds in September, when it raised $1.25 billion in a two-part bond sale in its first sovereign debt issue since the Dubai World debt restructuring roiled global markets in 2009. The five-year, $500 million note was priced to yield 6.7 percent, while the $750 million 10-year bond was priced to yield 7.75 percent. The bonds generated more than 370 orders valued at about $5 billion, it said then. Dubai, the second-biggest of the seven sheikhdoms that make up the United Arab Emirates, had to seek help from neighboring Abu Dhabi after the global credit crisis pushed property prices down by more than half from their peak in 2008, and frozen credit markets forced some state-owned companies to delay loan payments. State-owned Dubai World signed a final agreement with its creditors in March to restructure about $25 billion of debt. Dubai has received at least $1 billion in bids for a program to raise financing backed by future road-toll receipts, more than the government’s target of raising $800 million, two bankers familiar with the plan said May 3. To contact the reporters on this story: Dana El Baltaji in Dubai at delbaltaji@bloomberg.net; Arif Sharif in Dubai at asharif2@bloomberg.net To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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