Nakheel likely to resolve issues with $3.5bn bond

Nakheel made headlines around the world with its Palm island projects and the planned Hong Kong-sized Waterfront development, while its advertising billboards dotted around Dubai asked “What next?”

What next is the question now being asked by investors as one of the Middle East’s largest property developers contends with a US$3.5 billion (Dh12.85bn) Islamic bond due in December, which helped fund projects that included the world’s biggest man-made islands.

How the sukuk is handled will serve as a key test for the credit ratings of state-controlled companies in the emirate and could affect their ability to raise money on international markets. It is also widely seen as an indicator of how Dubai will cope with its overall debt burden, estimated at $70bn.