Nakheel Group launches USD 2.5 billion Sukuk

The Sukuk will conform to the principles of Islamic Sharia and will be based on an Ijara (lease financing) structure. Dubai Islamic Bank and Barclays Capital are the Lead Underwriters and Joint Bookrunners for the offering. Dubai World is guaranteeing the payment obligations under the Sukuk.

The money raised through the landmark Sukuk will be used for financing the general corporate activities of the Nakheel Group. On any future Qualifying Public Offering (QPO) of shares in any entity of the Nakheel Group, undertaken prior to the redemption of the Sukuk, investors will have the rights to subscribe for up to a certain amount of shares

Additional yield (returns) will be paid on redemption (to investors) of the Sukuk if either no QPO occurs or if the size of QPOs is below a certain threshold.

Commenting on the launch of the landmark Sukuk, Sultan Ahmed bin Sulayem, Chairman of Dubai World and Nakheel said: "Along with Dubai Ports, Nakheel is one of our key strategic companies and forms part of Dubai World, a world-class holding company and growth engine for the Emirate. With its three iconic Palm developments and 17 landmark projects worth more than US$ 30 billion under development, Nakheel has always been at the forefront of Dubai's expansion. This latest innovative Sukuk transaction will be another footprint of Dubai World in the capital markets."

Dr. Mohamed Khalfan bin Kharbash, UAE Minister of State for Finance and Industry and Chairman of DIB, said: "This landmark transaction for Dubai World and the Nakheel Group will set new benchmarks in the financial industry. We at DIB, along with our partners at Barclays, are extremely delighted to be part of Nakheel's inaugural Sukuk issue. The Sukuk's first of its kind equity-linked structure makes it an attractive transaction for a wide range of investors and the funds raised will help
the company achieve its long-term strategic objectives."

Mr. Cyrus Ardalan, Vice Chairman and Head of Middle East, Central Europe, Russia and North Africa Investment Banking at Barclays Capital, commented: "This is another landmark investment banking regional transaction which we are delighted to have been able to arrange with DIB for Nakheel, further to the ongoing strong partnership between the organisations. The innovative Islamic structure of this Pre-QPO Equity Linked Sukuk and its size will enable the Nakheel Group to further support its ambitious business plans."