Dubai's Nakheel will issue the first tranche of a AED4.8 billion ($1.31 billion) Islamic bond to trade creditors today (Thursday), its chairman said, as part of the property firm's complex debt restructuring underway since 2009. Chairman Ali Rashid Lootah said the developer, which held separate debt talks with banks and trade creditors, will issue a AED3.8 billion ($1.03 billion) first tranche of the sukuk at a profit rate of 10 percent. The Islamic bond will not be backed by the government but by Nakheel assets, the chairman said, adding no assets had yet been sold as part of the restructuring. Bank creditors will be offered an interest rate of four percent over London Interbank Offered Rate (Libor) and repayment after five years, Lootah said at a conference with reporters. Nakheel has offered trade creditors repayment of 40 percent cash and the remaining 60 percent in the form of an Islamic bond, or sukuk. The sukuk is already being offered at a 20 percent discount in the secondary market by some trade creditors, signaling their preference to cash out rather than wait for maturity. Nakheel, which overstretched itself building islands in the shape of palms and other ambitious projects, was part of state-owned Dubai World which recently completed a $25 billion restructuring with banks. The developer's ownership was shifted to the government last month as a concluding step of the parent firm's complex restructuring process. Nakheel's coordinating committee is made up of National Bank of Abu Dhabi, Dubai Islamic Bank and Barclays Capital.