The UAE Government has announced a $20 billion bond program to fund a number of its financial commitments. The bond is an unsecured fixed rate paper yielding 4% per annum with a five-year maturity. The first tranche of $10 billion of the issue was entirely subscribed by the UAE central bank. Many think that this step gives a smooth breeze on the economic development of the country.

In a statement UAE administration said “This issuance will provide Dubai Government with the necessary liquidity to substitute the liquidity that has dried up globally in the last 12 months and accordingly meet all upcoming financial obligations. This program will secure the necessary funding for Dubai to meet its financial obligations and continue its development program.”

One of the treasury officials said last Friday Brazil is going to sell treasury bonds to finance its new sovereign wealth fund, circumventing a legislative difficulty that had limited its cash supply. Deputy Treasury Secretary Cleber Oliveira said the bond issue will approve Brazil’s Government to deposit 14.2 billion Brazilian real ($5.9 billion), or 0.5% of gross domestic product, into this new fund by January 2009. He did not give other details on the sale.

Earlier Brazil’s Senate had allowed the fund’s creation; however, refused to tap 14.2 billion Brazilian real from the nation’s 2009 budget to finance this. The authority says the new sovereign wealth fund is intended to protect the country from any type of future financial crises and help the local companies increase their trade and expand worldwide.

Guido Mantega, Brazilian Finance Minister, who proposed its creation in the month of May 2008. He suggested that it be financed by public income besides the state’s target initial budget surplus of 3.8% of gross domestic product. Many legislators took part in debate on the plan intensely, where some arguing that it was unwise to store, rather than spend, too much public cash amid the global severe financial crisis.