Nakheel bonds, part of parent Dubai World’s planned $26bn debt restructuring, climbed the most in two months after JPMorgan Chase & Co said creditors may get paid face value.
The developer’s $750mn sukuk, or Islamic bond, added 5¢, the most since January 6, to 56.25¢ on the dollar at 4.31pm in Dubai, prices compiled by Bloomberg show.
The bond due in January 2011 has climbed from a low of 46.5¢ on February 17 and traded as high as 85.5¢ on November 25, when Dubai World said it may delay debt payments. Nakheel’s debt “may not warrant haircuts, and restructuring may only involve long maturity extensions,” JPMorgan said in a report.
UAE Economy Minister Sultan bin Saeed al-Mansouri said yesterday he is confident state-owned holding Dubai World will reach an accord with creditors, while finance minister Sheikh Hamdan Bin Rashid al-Maktoum said the seven-emirate UAE stands by Dubai.
The bank’s “report is very positive and it gives some clarity,” Louis Gargour, chief investment officer at hedge fund LNG Capital and a holder of Nakheel debt, said.
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