The Islamic bond market had just started to pick up – and then Dubai dropped the debt standstill bombshell.
The uncertainty over the possible default of the world’s largest Islamic bond, the $3.5bn (€2.3bn, £2.1bn) Nakheel deal, has thrown the market into turmoil.
The Nakheel bond, which was launched to much fanfare in 2006 at the height of the market boom and was due to be redeemed next month, was trading as low as 36 cents to the dollar on Friday, a third of its 109 redemption price, according to traders.
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