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Thu 27 Jan 2011 10:20 AM

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Emaar sets $500m sukuk profit rate at 8.5%

UPDATE 1: Dubai developer launches 5.5 year Islamic bond; sukuk is part of Emaar's $2bn bond programme

Emaar sets $500m sukuk profit rate at 8.5%
DOLLAR BOND: Emaar Properties plans to issue a benchmark dollar denominated bond as part of its $2bn Islamic bond program (Getty Images)

Emaar Properties, builder of the world's tallest building, has priced its
$500m Islamic bond at a profit rate of 8.5 percent, sources familiar with the
matter said on Thursday.

The five-and-a-half year Islamic bond or sukuk, issued as part a $2bn bond
programme, attracted bids for about $1.7bn, one source close to the deal said.

Emaar picked HSBC, RBS and Standard Chartered to arrange fixed income
meetings ahead of a possible bond issue, the developer said last week.

The property market in the United Arab Emirates suffered in the wake of the
global financial crisis as developers found themselves overstretched.

Dubai's ruler has a 31 percent stake in Emaar, which built the towering Burj
Khalifa. The company issued a five-year $500m convertible bond last year with
coupon of 7.5 percent to refinance short term liabilities.

Emaar shares closed 0.6 percent lower on the Dubai bourse on Thursday. The
broader index dropped 0.9 percent.