Dubai's Emaar Raises $500 Million Through Foreign Bonds
Dubai's leading property develop, Emaar, said Thursday it has raised $500 million through an offering international bonds aimed mainly at refinancing debt, raising hopes for eased finance for Dubai firms.
The company behind the building of the world's tallest tower, Burj Khalifa, said its first international fixed-income offering, in the form of sukuks, or Islamic bonds, was "very well received."
The sukuks have a maturity of 5.5 years at a yield of 8.5 percent, it said.
"The funds raised through the sukuk will be used to implement our funding strategy and extend our debt maturity profile," said Emaar's chairman Mohamed Alabbar in a company statement.
"The success of this issuance reflects the confidence investors have in our long term strategy and Emaar’s ability to implement it," he added.
Emaar Properties PJSC is publicly listed on the Dubai financial market, but the government of the Gulf city state own 31.22 percent of it.
A major developer throughout Dubai's five-year real estate frenzy, Emaar has succeeded in diversifying its business, focusing on hospitality and retail, while it spread its real estate business activities abroad.
This appears to have helped in reducing the impact of the property sector collapse on Emaar in the wake of the global financial crisis which dried up international finance for Dubai firms.
Emaar successfully tapped the international bond market in October launching convertible notes worth 500 million dollars that are due in 2015. It said the bond sale issue was aimed at converting short-term liabilities into long-term debt.
In October also, Emaar posted a seven-percent drop in its quarterly profits to $166.8 million.