Dubai's Emaar Properties, builder of the world's tallest tower, said on Wednesday its board has agreed to issue a convertible bond worth $375 million. Analysts said the note was likely to help Emaar, the UAE's largest listed property firm, refinance short-term debt obligations.
The firm will issue the bond through a special purpose vehicle which will lend the funds on to Emaar, it said in a statement on its website after an Emaar board meeting on Wednesday. The convertible bond, which has an increase option of $125 million and matures in December 2015, has a coupon of 7.25 percent to 8.25 percent, a banker familiar with the deal said. J.P. Morgan, Royal Bank of Scotland and Standard Chartered are joint bookrunners. Books are to close later on Wednesday, the banker added.
"This is a pretty landmark transaction. It wasn't so long ago that real estate and Dubai equalled a 'no-go'," said the banker, who asked not to be named. Emaar's plans come after the Dubai government returned to bond markets on Wednesday with a $1.25 billion bond, its first sovereign issue since the 2009 debt crisis. Order books suggested strong investor appetite.
"(Emaar's) objective is to term out short term debt and deleverage their balance sheet," the banker added. "The issue has already been pre-marketed to international investors to test appetite. The main demand is from convertible and hedge fund investors in Europe, then Asia and then the region." Among Emaar's high-profile assets is Dubai mall, the world's largest shopping centre.
Comments
Comments are closed.