UPDATE 1-Dubai to sell 15-yr benchmark sukuk Tuesday
(Adds details such as ijara structure, context)
DUBAI, April 22 (Reuters) - The government of Dubai plans to sell a benchmark-sized, U.S. dollar-denominated sukuk with a lifespan of 15 years on Tuesday, a document from lead managers said.
Initial price thoughts on the Islamic bond have been set between 5 and 5.125 percent, the document said. Benchmark size is traditionally understood to mean at least $500 million.
The sukuk will use the ijara structure, a common sale and lease-back format in Islamic finance.
The 15-year lifespan is unusual in the sukuk market; globally, most Islamic bond issues tend to have maturities no longer than five or seven years. However, Middle Eastern issuers have sold sukuk of up to 30 years duration in the past.
The banks arranging the transaction are Dubai Islamic Bank , Emirates NBD, HSBC, National Bank of Abu Dhabi and Standard Chartered.
Dubai last issued sovereign bonds in January 2013, raising $1.25 billion with a two-tranche sale consisting of a 10-year sukuk and 30-year conventional note.
Investor demand for that issue was massive, with the order book some 12 times oversubscribed; Dubai's economic boom means demand for this week's issue is likely to be very heavy as well, even though the emirate is still working through a pile of restructured debt left over from its 2009 property crash.
Reflecting investors' confidence, the price of Dubai's five-year credit default swaps, used to insure against a government default, dropped last week to their lowest level since mid-2008. (Reporting by David French; Editing by Andrew Torchia)
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