Nakheel creditors may win the right to seize a strip of barren waterfront land the size of Manhattan if the company defaults on the $3.5bn bond backing the development.

Investors will be able to seek foreclosure on the property’s mortgages should the Dubai World unit fail to repay the loan, according to the bond’s prospectus. The debt is due on 14 Dec, after which Nakheel has two weeks to remedy a default. The property forms part of the Dubai Waterfront project, where Nakheel plans to build a city twice the size of Hong Kong.

bloomberg.com