Emaar Properties saw strong demand for a $500 million seven-year Islamic bond, or sukuk, priced on Thursday, arranging banks said, in the latest sign that investor confidence in Dubai is returning as state-owned firms repay their debts.

Orders worth $4.65 billion were placed for the sukuk from 185 individual investors, according to statistics provided by the lead banks.

While problems remain at some state-linked enterprises, most notably at Dubai Group, a unit of Dubai Holding, Dubai has been successfully rebuilding its reputation among international investors since shocking global markets in November 2009 with a request to restructure $25 billion of debt at Dubai World.

“It appears now that the risk that was earlier associated with Dubai names are coming down and confidence is returning to the market after the state-owned companies repaid their obligations,” said Sajeer  Babu, a senior investment analyst at National Bank of Abu Dhabi.

“It is evident that Dubai companies are being opportunistic now since cost of funding has come down.”

Emaar, the builder of the world’s tallest tower, the Burj Khalifa, also benefited from tightening spreads and strong global demand for sukuk, which has seen a number of issuers complete sharia-compliant bond sales in recent months including a record-breaking deal from Qatar the previous day.

Yields on Emaar’s existing $500 million sukuk, issued early in 2011 at 8.5 percent and maturing in 2016 have tightened since the borrower announced its intention to issue a new bond.

The outstanding sukuk was bid at 109.5 cents on the dollar on Thursday morning, to yield about 5.8 percent, tightening from about 6.1 percent on Tuesday, according to Thomson Reuters data.

Thursday’s $500 million seven-year sukuk priced at par and carried a profit rate of 6.4 percent, a document from lead banks said. The profit rate was equivalent to 519.3 basis points over midswaps. More info