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Nakheel may offer 4% over benchmark: source

by Ben Roberts on Jul 14, 2010

Nakheel's repayments include money to suppliers and contractors.

Nakheel is to offer lenders a return of 4% higher than the benchmark rate in exchange for an extension on the loan timeframe, according to people close to the discussions.

The troubled developer, part of the state owned investment vehicle Dubai World, is close to finalising the conditions of its repayment to creditors as it restructures AED38.56 billion in debts.

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Earlier this week it was revealed that the developer and the consortium of major lenders will meet on 22nd July to formalise the repayment process.

Speaking to the Bloomberg newswire, a banker involved in the discussion said a margin of 4% would be paid, in exchange to an extension on the loans by five years. However, plans are not final and it is unclear whether the 4% is above the emirate or London – or Libor – bank rate.

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