Amlak to make sukuk payment on schedule

07 January 2010

Details of merger plan to be announced in early 2010

Dubai-based mortgage provider Amlak will make the next repayment on its $100m sukuk on schedule on 18 January, according to the UK’s HSBC bank, which is acting as paying agent for the firm.

The statement should help to reassure investors who are nervous about the financial health of major Dubai-based companies.

The sukuk pays 120 basis points above the London interbank offered rate (Libor) and is listed on the Dubai Financial Market. It has a tenor of 5 years and is due to mature in July 2010.

Separately, further details of the proposed merger between Amlak and another troubled UAE mortgage provider, Tamweel, are expected to be revealed in the near future. The UAE government said in November 2008 that it planned to merge the two companies, but few details have emerged since then.

The two companies have been hit by a lack of funding in the capital markets, falling property prices and repayment problems with customers.

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