Nakheel sets prices for $1b Islamic bonds

On Thursday Nakheel Dubai property set price for almost $ 1 billion Islamic bonds, the largest such sale this year, organizers said.

Two years bonds in the amount of Dh3.6 billion ($ 980.4 million) and at the price at 225 basis points above six-month Emirates Interbank Offered Rate (EIBOR), the bottom of the previously indicated price target, said organizers.

Six months EIBOR currently at 2.05 per cent, compared with 4.46 percent in January in the UAE is reducing its benchmark interest rates in tandem with the U.S. Federal Reserve rate cuts in order to maintain dirham peg to the dollar.

Earlier this month, Nakheel Dubai property chief financial officer Kar Tung Quek said the sale of bonds is to finance expansion. The developer has held at least three Islamic bond sale, including one of $ 3.52 billion in 2006, the world's largest.

Sukuk are denominated in dirhams, underscoring investor appetite for securities in the Persian Gulf on speculation in the region, possibly the revaluation of its currency - now pegged to the dollar fall - to stave leave inflation.