April 3, 2018 / 7:07 AM / in 8 months

UPDATE 1-Dubai's DAMAC hires banks to set up investor meetings before dollar sukuk

(Adds details, background, tender offer)

By Davide Barbuscia

DUBAI, April 3 (Reuters) - DAMAC Properties, the second-largest listed real estate developer in Dubai, has hired banks to arrange a series of investor meetings before a potential issue of U.S. dollar-denominated benchmark sukuk of five or seven years, a document from one of the banks showed.

Benchmark deals are generally meant to be at least $500 million.

DAMAC, rated “BB” by S&P, has mandated Barclays and HSBC as global coordinators and Barclays, Dubai Islamic Bank, Emirates NBD Capital, HSBC and Kamco Investment Company as joint lead managers and bookrunners for the potential issue of Islamic bonds.

DAMAC is a business partner of U.S. President Donald Trump and operates the only Trump-branded golf club in the Middle East. Trump World Golf Club Dubai, a second golf project planned by DAMAC, is expected to open by the end of 2018.

Dubai’s real estate prices, hit by new supply, could decline by 10 to 15 percent over the next two years, after falling by 5 to 10 percent in 2017, according to S&P estimates.

The real estate slump hit Dubai’s top property developers such as Emaar Properties and DAMAC, which in its latest financial results showed a nearly 47 percent plunge in net profit for last year’s fourth quarter.

The company will meet bond investors in Asia, the United Arab Emirates and the United Kingdom from April 5, the document showed. A senior unsecured sukuk offering will follow, subject to market conditions.

On Tuesday, DAMAC also invited holders of its existing $650 million sukuk due in 2019 to tender those notes for purchase by the company for cash.

It did the same last year, when it raised $500 million in sukuk arranged by Bank of America Merrill Lynch, Emirates NBD Capital, HSBC and VTB Capital. Just before that bond sale, DAMAC bought back around $198 million of its $650 million sukuk maturing in 2019.

Reporting by Davide Barbuscia; editing by Subhranshu Sahu, Larry King

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