Nakheel eyes debt, foreign buyouts

BOND SALE: Nakheel is looking at entering the debt market again before the end of the year, O'Donnell said. (ITP Images)

Dubai-owned property company Nakheel, which last week sold almost $1 billion of Islamic bonds, said it plans to tap the debt market again this year and is considering making acquisitions abroad.

The company is one of several firms eyeing the debt market again after a relative lull in Gulf bonds and loans following last year's defaults on US subprime debt, or loans to those with poor credit, which made borrowing more expensive.

"The debt markets are starting to have a lot of life after subprime," Nakheel Chief Executive Chris O'Donnell told newswire Reuters in Dubai on Tuesday.

"It is likely we will by the end of the year," he said, when asked when the company might tap the market again. He declined to give details.

Nakheel, developer of three palm-tree shaped islands off Dubai's coast, has sold more than $5.2 billion of bonds during the past 17 months, including in the world's largest Islamic bond sale.

"By the end of the year, I think you will see us active again in buying assets in distressed markets around the world," O'Donnell said, without giving more details.

In April, the firm reported a near five-fold surge in 2007 profits to $1.28 billion from the year before after selling more land and building fewer homes.

RELATED: Nakheel '07 profit surges on land sales

The developer's outstanding loans more than doubled to 10.16 billion dirhams ($2.77 billion) in the year to December 31. Its biggest facility, at 6.7 billion dirhams, matures in 2012.

The company also lists about $1.7 billion of Islamic bonds, or sukuk, on the Dubai International Financial Exchange (DIFX). The firm's latest sale of $980 million of sukuk was priced in dirhams.

RELATED: Nakheel sets $1bn bond price guidence

Bankers say the Gulf's once red-hot Islamic bond market is coming back to life after a nine-month lull, as issuers seek to tap Gulf currency revaluation speculation and regional low interest rates by selling bonds in local currencies. (Reuters)

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