The proposed sale follows a successful conventional bond issue of $1.25bn in September 2009.
"The outcome of the budget will really tell us how much we need to raise," says Abdulrahman Al Saleh, the director-general of the Dubai Department of Finance. The government forecast a budget deficit of Dh5.99bn ($1.9bn) for 2010 after cutting expenditure by 14.4% to Dh35.4bn.
The emirate has sought to streamline its public finances after the state-controlled company Dubai World shocked international markets and requested a debt standstill in November 2009. The government has now nearly completed its $23.5bn restructure of Dubai World.
Mr Al Saleh says the Dubai government's debt repayments due in 2011 and 2012 are not "significant". As the government seeks to strengthen its capital base, one obstacle remains in the way: the emirate does not currently have a credit rating, which may affect the proposed issue.
