<article>Dubai is in talks with banks for a possible Islamic bond sale, people familiar with the matter said, as it considers joining its Gulf neighbors in using public markets to fund a budget deficit.</article>

Dubai is in talks with banks for a possible Islamic bond sale, people familiar with the matter said, as it considers joining its Gulf neighbors in using public markets to fund a budget deficit.
The emirate is also looking at other fundraising options, including a conventional bond sale, loan or private placement, the people said, asking not to be identified because the information is private. An<a style="color: #000080;" href="http://www.dealstreetasia.com/?s=sukuk"> Islamic bond, or sukuk</a>, sale is the most likely option, the people said. A final decision hasn’t been made and the government may decide not to tap the market if conditions aren’t favorable.
Dubai is considering raising debt to help finance a budget deficit that may reach $680 million this year. Although the emirate’s economy relies mainly on tourism, retail and logistics rather than oil, it’s also been hit by a drop in energy prices. Dubai last sold a $750 million sukuk in 2014 and has a $600 million Islamic bond maturing in May, according to data compiled by Bloomberg.
The government is likely to come to the market soon once a final decision on the financing plans is made, and may raise as much as $1 billion in debt this year, the people said. No one at Dubai’s Department of Finance was available for comment.
Governments across the six-nation<a style="color: #000080;" href="http://www.dealstreetasia.com/?s=gcc"> Gulf Cooperation Council</a> are tapping capital markets after the price of oil, the region’s main source of income, slumped by more than half since 2014. Saudi Arabia raised $9 billion in its first dollar-denominated Islamic bond sale this month after selling a $17.5 billion bond in October, the biggest ever from an emerging-market nation. Qatar, Abu Dhabi, Oman and Bahrain have also raised billions of dollars from bond sales over the past year.
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By Archana Narayanan, Dinesh Nair and Arif Sharif

Dubai considers joining its Gulf neighbors in using public markets to fund a budget deficit.

Dubai in discussions with banks for potential Islamic bond sale

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Dubai in discussions with banks for potential Islamic bond sale

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