JAFZA Prices $650m Sukuk

Dubai government-owned Jebel Ali Free Zone (JAFZA) priced a $650 million seven-year Islamic bond, or Sukuk, arranging banks said.

The Sukuk was launched at a profit rate of seven per cent, at the tighter end of guidance, indicating strong investor demand for the issue.

Guidance was earlier set at between seven to 7.25 per cent.

Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank , National Bank of Abu Dhabi, Citi, Dubai Islamic Bank, Emirates NBD, Samba Financial Group and Standard Chartered are bookrunners on the Sukuk.

JAFZA, part of Dubai’s flagship Dubai World conglomerate, is putting together a financing package to meet a $2.04 billion Islamic bond which matures in November.

The company plans to raise $1.85 billion towards redemption of the Sukuk through this new issue and a $1.2 billion Islamic financing facility.

The remainder will be paid through JAFZA’s cash balance.

The original dirham-denominated bond is expected to be repaid two days after the new $650 million deal settles, lead arrangers said. Bondholders voted last month to let JAFZA repay the debt early.