Dubai has given property developer Nakheel enough funds to repay a $980-million Islamic bond due on May 13, the company has said.
Nakheel, a part of Dubai's conglomerate Dubai World, is widely expected to repay the bond on time despite the absence of a formal debt deal on parent Dubai World, which is in talks with banks to restructure $24.8 billion in debt repayments.
In a statement to the Nasdaq Dubai bourse, Nakheel said on Tuesday, "Nakheel today announces that the Dubai Financial Support Fund has made available sufficient funds to allow for the repayment in full of the sukuk issued by Nakheel Development 3 Limited, which matures on 13 May 2010."
Dubai had set up a corpus, the Dubai Financial Support Fund, to distribute funds raised via $20 billion sovereign bond programme last year, to government related entities.
Dubai World is in talks with a core seven member bank panel to restructure debt repayments. Dubai World announced last year that it would be able to meet $26 billion in debt obligations.