Nakheel's new Islamic bond is already trading at a discount to its face value, underscoring investors' continued doubts about the embattled property giant's finances.
The palm islands developer issued the Dh3.8 billion (US$1.03bn) Islamic bond, or sukuk, yesterday as part of its financial restructuring. The sukuk shares went to contractors who were not paid their dues after Nakheel's business experienced difficulties following Dubai's property slump.
Ahmad Alanani, a senior executive officer in the fixed-income department of Exotix in Dubai, said retail buyers were snapping up shares from contractors at about 84 cents on the dollar, sending yields skywards. Many cash-strapped contractors are expected to sell their shares immediately, even though the sukuk returns 10 per cent a year.
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