The Gulf region needs a proven secondary fixed income trading market and strong local bids before issuers warm to longer term maturities, a senior executive at Abu Dhabi-owned investment fund Mubadala says.

The region, cushioned by its oil wealth, had traditionally been averse to tapping international markets for debt. But that has changed in the past decade with Dubai taking a lead by using debt to finance its rise to a regional hub.

"This is a developing economy and before you can develop longer term issuances, you need to spend time with investors," Matthew Hurn, head of group treasury at Mubadala, said.

"There are two requirements to this - a proven secondary trading performance, and a strong local bid... Another consideration is whether over time the bond can be included in an index."    

Mubadala itself issued a $1.75 billion two-tranche bond earlier this year, made up of a $1.25-billion five-year issue and a smaller $500 million 10-year issue.   

"So far, issuance has been very successful," Hurn said. "The next step would be to explore different areas of liquidity."    

"This would require the organisation to understand what it wants to achieve, how it wants to achieve it, and how it will structure its transactions."    

On Wednesday, Dubai's government placed almost $2 billion in new five-year Islamic bond issues, a move investors believe will raise confidence in the debt-laden emirate.

The move followed a series of roadshows across Europe, Asia and the United Arab Emirates. -Reuters