Dubai’s Jebel Ali Free Zone (Jafza) is set to repay a AED7.5bn ($2bn) sukuk (Islamic bond) by the end of June, well ahead of its November maturity, as the emirate shows that it is moving beyond the financial crisis that pushed it to the brink of default in 2009.

According to bankers close to the company, Jafza will draw down a $1.2bn eight-year loan on 24 June and will use the proceeds, along with a new seven-year sukuk expected to be around $650m, to repay the sukuk on the same day.

“Jafza want to send a clear message to the market that they are in a good position financially,” says one source close to the company. The repayment will follow the refinancing of DIFC Investment’s $1.25bn sukuk due on 13 June. The two obligations had long been identified as some of Dubai’s most potentially troublesome debts due in 2012.

Another source says that as long as the sukuk issue, which is currently being marketed to international investors and is expected to be finalised by mid-June, is completed on time the loan will be drawn in full on 24 June and the existing AED7.5bn debt repaid simultaneously. “There should be no two facilities outstanding at the same time,” he adds.

Jafza, which operates a business park in the south of Dubai, received approval from bondholders to repay the AED7.5bn sukuk early in late May. In addition to the $1.2bn loan, which it is amortising and is priced at 4.25 per cent, falling to 3.75 per cent over the life of the loan, and the $650m new sukuk, the company will repay the outstanding amount of around $200m from its own resources.

“Jafza was clear when it presented its refinancing plan in March that it wanted it all to be wrapped up before the summer, and it looks like it is going to schedule,” says a third source involved in the deal.

Jafza did not respond to requests to comment.