Nakheel Is Said to Offer 4-Percentage-Point Premium in Debt Restructuring - Bloomberg

Nakheel PJSC, the property developer owned by Dubai World, plans to offer lenders interest of 4 percentage points more than benchmark rates as it seeks to restructure $10.5 billion of debt, according to two bankers with knowledge of the plan.

Nakheel, the state-owned builder of a palm tree-shaped island development off Dubai’s coast, will offer the new interest rate on its loans in dollars and dirhams at a meeting tomorrow, said the bankers, who declined to be identified because the matter is private. In return, lenders would agree to extend the lifetime of the loans by five years, the people said.

The proposed terms aren’t final, according to one of the people. The loans make up part of the debt that Nakheel is seeking to reorganize, which also includes outstanding payments to suppliers and contractors. The spreads will be over the Emirates interbank offered rate or the London interbank offered rate, the bankers said.