Dubai Is Unlikely to Restructure Nakheel Bond, Ashmore Says

Dubai will choose to repay a government-guaranteed $3.52 billion bond sold by state-owned real-estate developer Nakheel PJSC rather than change its terms, according to Ashmore Investment Management Ltd.

Blackrock Global Funds and Ashmore are the two largest holders of the Nakheel issue, according to data compiled by Bloomberg. Ashmore Investment Management owns 1.09 percent of the bond, the data show. Ashmore, which started its first fund in 1992, invests in currencies, debt and special situations.

Rating firms have downgraded Dubai state-owned companies on concerns the emirate may not have sufficient funds to support its struggling entities. The credit crisis ended a four-year real-estate boom in Dubai and forced the United Arab Emirates government to bail out the two biggest mortgage lenders. The crisis wiped 50 percent off real-estate prices from their October peak, according to Deutsche Bank AG.