Debt boost as Dubai repays $980m bond

DUBAI has repaid a $980 million (£669m) Islamic bond issued by developer Nakheel, while another state-owned firm said it was confident of refinancing an upcoming loan as it digs out from a massive debt burden.

Nakheel, builder of the palm-shaped artificial islands off Dubai, repaid the bond on schedule as talks continue between its parent, Dubai World, and lenders to restructure $24.8 billion in debt.

"It's a good first step and the right thing to do," said Khuram Maqsood, managing director at Emirates Capital. "If they had defaulted on the current payment, that would have been a setback for the restructuring process."

"It looks as though the process is moving on as per the expectations of the market," John Bates, head of fixed-income at Silk Invest in London, said of Nakheel's bond repayment. "This should be positive for the region."