Dubai Entities Turn to Mandatory Convertible Bonds (MCBs) Amid High Interest Rates

In a rough economic environment characterised by high interest rates, a few Dubai-listed companies have resorted to the issuance of Mandatory Convertible Bonds (MCBs) as a key strategic finance tool.

Strategic Shift Towards MCBs

Drake & Scull International (DSI) – The MCBs by April were an initiative in a proactive sense, considering that the realms of debt write-off and ongoing financial restructuring continue.

Recent Developments and Company Strategies

Investor Sentiment: Since long-term growth potential is still there for such companies, very high default probabilities entice investors.

Impact on Investors and Market Dynamics

Cost Efficiency: It costs less to issue MCBs than to borrow through more conventional means.

Financial Strategy and Cost Considerations

Regulatory Framework: SCA implements regulations to protect the interest of investors.

Regulatory Influence and Market Trends

Financial Landscape: Continued heavy reliance on MCBs likely if interest rates persist.

Future Outlook