Dubai, which is planning a benchmark sovereign dollar issue in coming days as it seeks to bridge a budget deficit, has set up a new $5 billion Euro Medium Term Note (EMTN) programme.

The emirate has hired Mitsubishi UFJ Securities, Standard Chartered Bank and UBS AG as arrangers and dealers for the program, it said in a statement.

Emirates NBD and National Bank of Abu Dhabi will be the dealing banks for the bond program.

Dubai's budget deficit stood at Dh6.02 billion ($1.64 billion) in 2010, the prospectus released for the new bond programme showed. Its direct debt as of May 20 was Dh115.4 billion ($31.42 billion), according to the prospectus.

Last week Dubai's department of finance announced it planned to come back to the debt market with a potential dollar bond issue, buoyed by tightening spreads and an oversubscribed bond from its flagship airline recently.

That issue will come under its existing $4 billion note program which was launched in 2008.

Appetite for Dubai debt has been rising in recent months, with the emirate seen as a safe haven amid the political instability engulfing the wider region.

The emirate has no current plans to implement corporate or income taxes, the prospectus said.

Earlier this year, Dubai's ruler approved a 2011 government budget with a deficit of 3.78 billion dirhams ($1 billion), or 1.3 per cent of economic output in 2009, the latest year for which full GDP data is available.-Reuters