First the debt standstill, and now the developer of that infamous palm tree island thing wants trading in its three listed Islamic bonds halted.
From Nasdaq Dubai on Monday morning:
Following the announcement on Wednesday 25 November from the Government of Dubai, Nakheel has today asked for all three of their listed Sukuk’s (Nakheel Development Limited, Nakheel Development 2 Limited, Nakheel Development 3 Limited) to be suspended until it is in a position to fully inform the market.
The three instruments listed on the exchange are a $3.5bn sukuk due on December 14, a 3.6bn dirham sukuk ($980m) due on May 13 and a $750m sukuk due on January 16, 2011.
And here was the quote on the $3.5bn sukuk earlier this morning:
Also worth watching today will be the Jebel Ali Free Zone Authority — the operator of one of Dubai’s key economic development zones — because a semi-annual coupon payment is due for payment on more than $2bn of bonds issued by the company in 2007 is due.
From the FT:
The repayment is the first due from a Dubai World company since the state-backed giant requested a standstill agreement last week on $4bn of bonds issued by its property development company Nakheel. Officials said last week that Jafza and ports operator DP World would not be included in a financial restructuring of Dubai World. But prices for the bond — which like the Nakheel instrument is a sharia-compliant sukuk structure designed for Islamic investors — fell earlier this week.
Update:
The Jebel coupon has been paid, according to Reuters:
DUBAI, Nov 30 (Reuters) – Jebel Ali Free Zone has made a scheduled coupon payment on its 7.5 billion dirhams ($2.04 billion) Islamic bond, a source said on Monday, in the first major test of Dubai’s ability to meet debt payments. “They paid it, the rate was 4.175 percent,” the source, who asked not to be identified, said. Conglomerate Dubai World asked creditors last week to delay repayment of billions in debt for itself and property developer Nakheel for six months as it restructured operations. The shock announcement initially sent global markets slumping. The Jebel Ali Free Zone is a unit of Dubai World.
Update II:
The following flashes went up on Reuters a little earlier this morning:
TOP DUBAI FINANCE OFFICIAL SAYS THERE IS A BIG CONFUSION BETWEEN GOVT OF DUBAI AND DUBAI WORLD
TOP DUBAI FINANCE OFFICIAL – RESTRUCTURING MIGHT AFFECT CREDITORS IN SHORT TERM BUT THERE ARE LONG-TERM BENEFITS
TOP DUBAI FINANCE OFFICIAL – THE GOVERNMENT DOES NOT GUARANTEE DUBAI WORLD’S DEBT
TOP DUBAI FINANCE OFFICIAL – BANKS DO NOT NEED ANY MORE LIQUIDITY HELP FROM C.BANK
TOP DUBAI FINANCE OFFICIAL SAYS “NO NEED TO WORRY”
TOP DUBAI FINANCE OFFICIAL SAYS DUBAI WORLD NOT PART OF DUBAI GOVERNMENT
TOP DUBAI FINANCE OFFICIAL SAYS DUBAI WORLD CREDITORS CARRY RESPONSIBILITY FOR THEIR LENDING DECISION
Related links:
UAE post-holiday hit – FT Alphaville
UAE push to head off debts damage – FT
The intrinsic unimportance of Dubai World and the important wider message it conveys – Willem Buiter
Dubai default swaps show no distress on Abu Dhabi’s bailouts – Bloomberg
UAE central bank makes reassuring noises – Naked Capitalism
CSI Dubai - FT Alphaville