RAK to buy back bonds, offers new debt swap

Offer is so 'surplus cash resources' can be utilized, RAK Capital sovereign issuance is consolidated
RAK to buy back bonds, offers new debt swap
BOND BUYBACK: Ras Al Khaimah has offered to buy back $325m of Islamic bonds maturing in 2012 at face value
By Bloomberg
Sun 21 Nov 2010 01:44 PM

Ras Al Khaimah, one of the seven sheikhdoms that make up the UAE, has offered to buy back $325m of Islamic bonds maturing in 2012 at face value or swap them with new securities due in 2016.

Bondholders that offer to sell before 4 pm on Nov 30 will also receive an early redemption premium of $20 per $1,000 face value, according to a statement dated Nov 15 from the Ras Al Khaimah government and posted on the website of Nasdaq Dubai today.

Investors may also swap up to $150m of the securities for debt due in 2016 to be sold by RAK Capital, according to the statement.

The government has also offered to buy back AED1bn ($272m) of bonds due 2013 issued by RAK Capital at a price to be announced on Dec 1, according to the statement.

The reason for the offer “is to utilize certain surplus cash resources, to extend the maturity profile of certain outstanding indebtedness of the government” and “consolidate its sovereign issuance within RAK Capital,” the statement said.

Citigroup and Royal Bank of Scotland Group are managing the sale, according to the statement.

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