Dubai real estate developer Nakheel has repaid in full the AED4.4bn ($1.2bn) securitised bond it issued in January, according to Dubai-based bankers close to the deal.

Nakheel repaid the money on 15 October, one month ahead of the deadline.

In May, Nakheel held negotiations with the banks that had subscribed to the bond to push back the repayment deadline from July to November.

Nakheel used future revenues from property sales as security for the debt. The company had to set aside its income from the sale of specific properties in order to repay the loan.

Nakheel paid 325 basis points over the London interbank offered rate (Libor) for the bond. The early repayment will be a relief to many investors in Nakheel, particularly banks that bought part of its $3.5bn sukuk (Islamic bond)issued in 2004. The sukuk matures in the first week of December.

When Nakheel extended the repayment date for the securitised bond in May, investors were worried that it would struggle to pay back a total of $4.5bn in the space of a few weeks.

Local banks Emirates NBD, Mashreqbank and Noor Islamic Bank, and Saudi Arabia’s Samba, financed the debt, with Samba buying 30 per cent. Nakheel declined to comment.