Dubai asked lenders pitching to manage the emirate's recent sovereign bond issue to offer the government a $500 million loan over three years, the Financial Times reported on Monday, citing bankers.

Dubai issued a $1.25 billion bond with a yield of 6.7 per cent for the five-year tranche in late September, which drew about $5 billion in subscriptions.

'It was 'pay-to-play,'' a senior regional banker invited to join the mandate told the FT.

'It wasn't a conversation. It was more like 'this is the price to pay.' There was no reward for past support.'

A spokeswoman for Dubai had no immediate comment.

Deutsche Bank, HSBC and Standard Chartered were mandated for the offering but declined to comment, the FT said.

Bankers familiar with the matter said significant sums had already been committed while others say negotiations are continuing over the size and tenor of potential loans, according to the FT.

The government denies raising new bilateral loans from the mandated banks, FT said.-Reuters