Nakheel lists AED 3.6 billion Sukuk

Nakheel, a Dubai World company and one of the world's largest and most innovative real estate developers, listed today a 2-year AED denominated Sukuk (Islamic-compliant bond) on the Dubai International Finance Exchange (DIFX) valued at AED 3.6 billion.

The Sukuk will conform to the principles of Islamic Sharia and will be based on an Ijara (lease financing) structure. Dubai Islamic Bank, JP Morgan and NBD Investment bank were the lead managers and joint book runners for the transaction. Dubai World is guaranteeing the payment obligations under the Sukuk.

The deal came after an extensive roadshow which covered the UAE, Bahrain, Saudi Arabia, Qatar and the United Kingdom. A total of more than 30 orders for in excess of AED 4.2 billion were received. Following initial price guidance of 6 month Emirates Interbank Offered Rate (EIBOR) + 2.25% 2.50% bps, the transaction was priced at the tight end at 6 month EIBOR + 2.25% bps. The book closed at a size of AED 3.6 billion.

Kar Tung Quek, Nakheel Chief Financial Officer, said:

"Nakheel achieved land and property sales of approximately AED 23 billion in the first four months of this year compared with AED 20 billion in all of 2007 which has undoubtedly boosted investor confidence and demand for this Sukuk offering. Whatever may be happening in credit markets elsewhere, investors here are really seeing how robust the Dubai real-estate market is."

The Middle East took the largest share of the offering (88%), with the remaining going to international accounts. By account type, banks comprised 81% of the order book, followed by fund and asset managers (15%) and private banks (4%).

In December 2006, Nakheel listed the world's largest Sukuk of $3.5 billion on the DIFX followed by a further $750 million Sukuk in January 2008. Nakheel also announced last month that profit had surged almost four-fold to $1.28 billion net income in 2007.