Dubai: Repayment of a $4.1 billion (around Dh15.05 billion) bond issued by Nakheel was set to be completed yesterday, when other Islamic bond issuers reassured investors about their repayment capability in replies to a ‘soundness and health' check by Nasdaq Dubai.
Nakheel's repayment was on the way with funds distributed to the clearing system after being sent to the principal paying agent, the developer said.
Two bondholders told Reuters the funds were still to clear. "This is a technicality," said Rami Sidani, Schroders Middle East head of investment, referring to the payment.
"The decision was made and the announcement was clear and so now it's a formality. This sukuk is behind us."
Government utility Dubai Electricity and Water Authority (Dewa) told bondholders it would make a coupon payment on a $3.2 billion Islamic bond today as scheduled.
Dewa made its announcement in response to questions from Nasdaq Dubai for information to determine the current value of securities listed on the bourse, in a move linked to Dubai World's restructuring of its $26 billion debt.
Other Islamic bond issuers, including DP World, Dubai Holding, Dubai Islamic Bank and DIFC Investments also responded to the request. Goldman Sachs analyst Ahmad Akarli said in a note that the investment bank estimated Dubai World had $40 billion debt outstanding and other Dubai entities faced similar challenges.
Nakheel has two other bonds — a Dh3.6 billion issue maturing on May 13 next year and a $750 million deal due in January 2011.
Selection of assets
At the end of 2008, Nakheel said it had a project portfolio of about $110 billion (Dh403.7 billion). According to its financial statements, Nakheel wholly owns 56 companies linked either to land, unfinished projects, completed developments, facilities management and a monorail system on its Palm Jumeirah island.
Palm Jumeirah, Palm Jebel Ali, Palm Deira
Palm Jumeirah is the most advanced, in terms of work completed, of the three islands in the shape of palm trees off the coast of Dubai. Trump Tower, a $789.5 million project planned on Palm Jumeirah, was suspended in December 2008.
Reclamation work on the 300 islands in the shape of the world's continents four-kilometre offshore Dubai is completed with around 175 sold, according to media reports. The cost of each island is $20 million to $50 million. The project will add more than 232 km of beachfront to the emirate's coastline.
A mixed-use commercial, residential, resort and amenity development the size of Manhattan in Jebel Ali, Dubai, planned for 1.5 million people. The southern part of the project and a series of man-made islands in the shape of a crescent backed Nakheel's 2009 sukuk.
Ibn Battuta Mall
One of at least 40 shopping malls in the emirate and based on the travels of 14th century Arab explorer Ibn Battuta.
A 26 million square foot middle-income residential community located next to Ibn Battuta Mall.
The largest trading hub for Chinese products outside mainland China, opened in 2004.