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Non Gulf Bond Holders Threaten to ‘Go Nuclear’ Over Repayment of Bonds

…Meanwhile, bondholders of the Nakheel sukuk that is due to be redeemed on Monday took part in a conference call organised by Deutsche Bank yesterday. Deutsche Bank, which is trustee to the sukuk, said it was seeking clarity from the issuer about its plans to restructure debt, according to two investors who participated in the conference call. Bloomberg reported that the call finished without any discussion of adopting specific recommendations, said the investors, who declined to be identified because the discussion was private.

One New York hedge fund manager said: “It was a ‘listen-only’ call that repeated all the public statements by the Dubai Government. There was absolutely no news or new information. It was a total waste of time.”

A letter from Ashurst, the London law firm hired by the non-Gulf bondholders, has been sent to Nakheel rejecting the call for a standstill on the sukuk repayment and seeking repayment in full on the due date.

A bondholder said: “We will make it clear that we are not afraid to push the nuclear button.”

“We will make it as difficult as possible for Dubai to borrow money at good rates again and try to embarrass them that way. We are enforcing our rights and expecting payment.”…MORE

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Tags: Ashurst, Bond Holders, Bondholder, Bondholders, Bonds, Borrow Money, Clarity, Conference Call, Deutsche Bank, Dubai Government, Due Date, Hedge Fund Manager, Investors, London Law Firm, Nuclear Button, Public Statements, Standstill, Sukuk, Trustee, Waste Of Time