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Nakheel Possible Default to Affect $5.25 Billion Debt

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posted on Dec, 13 2009 @ 01:04 PM
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Nakheel, the developer of palm-tree shaped islands off the Dubai coast, had a first-half loss of 13.4 billion dirhams as real-estate prices crashed in the Gulf business hub.

payment is due tomorrow and the chances of a full payment at this point are very slim


Nakheel PJSC’s possible non-payment of its Islamic bond due tomorrow will trigger defaults on two other securities, bringing the total of affected securities to $5.25 billion, bond documents show.

Investors are waiting to see if the Dubai state-controlled developer will pay the maturing $3.52 billion Islamic bond, known as sukuk. The Dubai government said on Nov. 25 that state- run holding company Dubai World is seeking a “standstill” agreement on its debt, including for the Nakheel unit.

Bloomberg
Nakheel’s other two bonds are a 3.6 billion-dirham ($980 million) floating-rate note due in May and a 2.75 percent, $750 million sukuk maturing in January 2011.



[edit on 13-12-2009 by DaddyBare]




posted on Dec, 13 2009 @ 01:28 PM
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MMM, the smell of default in the afternoon. I wonder if this has the potential to send shock waves through out the world. Things are not good at all.

Such is life I guess, at least when it is run by a bunch of crooks.



posted on Dec, 13 2009 @ 05:09 PM
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Originally posted by Hastobemoretolife
MMM, the smell of default in the afternoon. I wonder if this has the potential to send shock waves through out the world. Things are not good at all.

Such is life I guess, at least when it is run by a bunch of crooks.


I know you didn't get to read the story as I had the link screwed up...Fixed now... but there was another part

Dubai’s government, which owns 100 percent of Dubai World, hasn’t guaranteed the company’s debt and creditors must help it restructure,
BNP Paribas SA and EFG-Hermes Holding SAE analysts said last week the company may repay bondholders as much as 70 cents on the dollar and issue new securities to restructure the remainder of the debt.

of course that does ASS/U/ME they would have the funds to cover than self imposed lower payout

know what's really sad... not that long ago I would have said "Oh my God... A five billion dollar default"!!!! Now it like, Phew, only 5 billion, got lucky there.



 
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