Emaar sets $500 mln sukuk profit rate at 8.5 pct

Emaar sets $500 mln sukuk profit rate at 8.5 pct

Developer launches 5.5 yr $500 mln Islamic bond; Profit rate for the bond set at 8.5 pct – sources; Bond part of Emaar's $2 bln program

January 27, 2011 3:39 by Reuters

Emaar Properties, builder of the world’s tallest building, has priced its $500 million Islamic bond at a profit rate of 8.5 percent, sources familiar with the matter said on Thursday.

The five-and-a-half year Islamic bond or sukuk, issued as part a $2 billion bond programme, attracted bids for about $1.7 billion, one source close to the deal said.

Emaar picked HSBC, RBS and Standard Chartered to arrange fixed income meetings ahead of a possible bond issue, the developer said last week.

The property market in the United Arab Emirates suffered in the wake of the global financial crisis as developers found themselves overstretched.

Dubai’s ruler has a 31 percent stake in Emaar, which built the towering Burj Khalifa. The company issued a five-year $500 million convertible bond last year with coupon of 7.5 percent to refinance short term liabilities.

Emaar shares closed 0.6 percent lower on the Dubai bourse on Thursday. The broader index dropped 0.9 percent.

(Reporting by Sujata Rao, Dinesh Nair and Stanley Carvalho; Editing by Will Waterman)