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09 December 2023

Nakheel confirms payment on $750m sukuk

Nakheel bonds surged last month. (SUPPLIED)

By Agencies

Nakheel is due to make a payment on a $750 million (Dh2.75 billion) Islamic bond next week just as its parent company Dubai World looks to submit a formal standstill request on $22 billion of debt.

Nakheel has a $10.3m distribution payment due on January 19 for trust certificates maturing in 2011, it said yesterday in a filing on the Nasdaq Dubai. Dubai World is expected to soon make a formal standstill request to creditors for its debt while it devises a restructuring plan.

Nakheel bonds surged as much as 75 per cent from their lows last month on speculation that bondholders will get a better deal.

"Bondholders know that the recovery rate on Nakheel's remaining bonds is not going to be zero," said Abdul Kadir Hussain, Chief Executive Officer of fund manager Mashreq Capital DIFC Ltd. "They understand there is a possibility that these securities are going to be restructured and they are trading and valuing them as such."

Nakheel's Dh3.6bn ($980m) floating-rate note due in May, rose to 71 cents on a dollar on Monday, gaining 58 per cent from the lowest level on December 7, Bloomberg data showed. Nakheel's Dh2.75bn bonds due January 2011 traded at 63 cents on the dollar on Monday. Prices for the notes have gained 75 per cent since December 9.

The property developer said yesterday it is scheduled to make a "periodic distribution" of $10.3m on its $750m Islamic bond maturing next year on January 19.


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