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Sun 24 Jun 2012 11:40 AM

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Dubai's JAFZA repays US$2bn Islamic bond

The timely repayment of JAFZA's sukuk was a major investor concern this year

Dubai's JAFZA repays US$2bn Islamic bond
The timely repayment of JAFZAs sukuk was a major investor concern this year.

Dubai state-owned industrial hub Jebel Ali Free Zone (JAFZA) repaid in full a AED7.5bn (US$2.04bn) Islamic bond, or sukuk, on June 21, five months ahead of maturity, a regulatory filing from the company said on Sunday.

The early redemption of the sukuk certificates was expected after the company, a unit of state conglomerate Dubai World , secured agreement from bondholders to change the terms of the notes last month.

The sukuk was refinanced through a US$1.2bn sharia-compliant loan, along with a new sukuk issue of US$650m and the company's own cash resources.

The timely repayment of JAFZA's sukuk was a major investor concern this year, but early redemption has helped lift confidence in the emirate's credit story, as demonstrated by a strong rally on Dubai sovereign and government-related bonds last week.