Dubai Raises US$5 Billion from "Private Sector" - Or Did It?

You've probably seen the news that Dubai raised US$5 billion in the second tranche of its US$20 billion bond program.

Much is being made of the fact that it secured funding this time from the "private sector" and didn't have to rely on help from the Emirate of Abu Dhabi.

Last time I looked the majority owner of both National Bank of Abu Dhabi and AlHilal Bank was the ADIC (Abu Dhabi Investment Council).

Isn't this pretty much what happened with Tranche #1?

Abu Dhabi didn't actually directly  purchase the bonds from Dubai.  The Central Bank of the UAE did (the first US$10 billion.)  Of course, with money given it by Abu Dhabi.

To characterize Tranche 2 as a non Abu Dhabi Government private sector deal is a bit of a stretch.  Well, maybe more than a bit.

And when you think about it, if you're Abu Dhabi, isn't it better to have the CBUAE or NBAD/AlHillal fronting your money?  It's a lot easier for a Sheikh Mohammed to stiff a brother ruler than it is the central bank or two financial institutions.